Sexually Transmitted Infections
 - Question

Lord Black of Brentwood: To ask His Majesty’s Government what steps they are taking to tackle the increasing rates of sexually transmitted infections in England.

Lord Black of Brentwood: My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare an interest as a patron of the Terrence Higgins Trust.

Lord Markham: We remain committed to improving sexual health in England. The UK Health Security Agency conducts comprehensive surveillance of sexually transmitted infections and supports local areas to use this data to inform sexual health services delivery. We are working with it and other key delivery stakeholders to explore options for the best use of both existing and innovative preventive interventions, as well as strengthening messages to the public on how to reduce the transmission of STIs.

Lord Black of Brentwood: My Lords, PrEP has been a game-changer in the fight against HIV, and making sure that as many people at risk of infection as possible have access to it is fundamental to meeting the target of ending new HIV cases by 2030, but at the moment we are failing to ensure that access because of the immense pressure on sexual health services. Nearly 60% of people are forced to wait more than three months to access PrEP through that route. Does my noble friend agree that one way to deal with this problem is to make PrEP available through pharmacists, as contraception now is—an initiative backed by the Royal Pharmaceutical Society—and does he recognise that such a policy, in line with the ambition of Pharmacy First, would not just relieve pressure on sexual health services but encourage uptake among women, who make up 31% of people accessing HIV care but represent only 2% of PrEP users?

Lord Markham: I thank my noble friend for all the work he does in this space and absolutely agree that we are world leaders in the use of PrEP. We have 86,000 people currently using it. It is a key prevention tool and something that we want to expand as widely as possible. There is an excellent pilot happening in Brighton at the moment, where you can get PrEP online, and I absolutely agree that we should look at Pharmacy First as a way to expand that even further.

Lord Fowler: Does the Minister remember reports on the AIDS campaign in the 1980s, which showed not just a reduction in AIDS but a fall in all other sexually transmitted diseases generally? How much is now being spent on such public education campaigns in this area? Is this spending increasing or decreasing?

Lord Markham: Overall, we spend £3.5 billion on public health. I do not have the breakdown of the advertising within that, but I will happily follow up with that. That is a small increase over the last year. Education is key to all this. Part of the reason for the increase in sexually transmitted diseases is that people used to use condoms because they were scared about two things: pregnancy and HIV infection. As both those risks have gone down, so has the use of condoms, which has resulted in the higher level of sexually transmitted diseases—so education is key.

Baroness Barker: My Lords, in 2022 the rate of STIs went up by 22% and, at the same time, the public health budget has been reduced by 29%. The strain on those services is now intolerable. Is it not time to have a proper, real increase in that budget?

Lord Markham: The figures are slightly misleading because, of course, that was in comparison to a Covid year, when there was much less testing. In fact, if you look at it versus pre-pandemic figures, the numbers are 16% down compared with 2019; that is the real comparison we should look at here. At the same time, I think we would all agree that £3.5 billion is a big investment in this space. It has gone up slightly over the past year but, as I mentioned earlier, education is also key in this space.

Lord Hunt of Kings Heath: My Lords, can we come back to the issue raised by the noble Lord, Lord Black: whether community pharmacies could play a bigger role in relation to PrEP? Does the Minister accept that, although there is much that community pharmacies could do, they face a fundamental financial crisis at the moment, with many going out of business? Will the Government accept that they are going to have to give more support to community pharmacies for them to do the kind of things that the noble Lord is asking for?

Lord Markham: Yes. I believe that there is a real win-win possibility here, where we can get more services through Pharmacy First—obviously, that is good for primacy care access—and give further support to pharmacies. I was having this conversation just this morning. We made contraception available through pharmacies in April 2023; we will get the results of that back shortly. Things such as sexual health and PrEP are absolutely what we are looking at.

Lord Bailey of Paddington: My Lords, in view of the fact that it is often the hardest-to-reach communities that suffer the greatest pain from the uplift in sexually transmitted diseases, can the Minister tell us what work  the Government are doing to reach such communities, particularly the young, to educate them so that they can protect themselves?

Lord Markham: My noble friend is absolutely right: young people—15 to 24 year-olds—represent one of the highest levels of this. In 2020 we made relationships, sex and health education classes available compulsorily in schools. We are currently reviewing that to see the effectiveness of it, with a view to expanding it further.

Baroness McIntosh of Hudnall: My Lords, can the Minister tell the House what the current rate of take- up is for vaccination against HPV—human papillomavirus —and what efforts are being made to make sure that all those who should be vaccinated are?

Lord Markham: I will need to come back with the exact figure for the vaccination rate. I know that it is proving quite effective, which is important. On the measures we are taking, we are investing £25 million in women’s health hubs precisely to enable these sorts of vaccination programmes. I will happily follow up in writing with the detail.

Baroness Cumberlege: My Lords, does my noble friend the Minister agree that, in this technological age, it is very important that people are able to access everything they need from the NHS via their phone or a laptop? I am working to ensure that all women have access to their maternity record via the NHS app, but only 23% of sexual health clinics currently allow online booking. Can my noble friend tell me how the Government plan to address this issue?

Lord Markham: I thank my noble friend. As she knows, I am a big advocate of everything that we can do with the app. We are absolutely looking to extend its services, which will include sexual health clinics. In the past year alone, we have increased from around 10% of GPs allowing someone to see their records to around 70% today. Sexual health clinics are clearly an area that we need to look at next.

Baroness Merron: My Lords, with a real-terms cut of nearly a third for sexual health services over the past eight years, it is ever more difficult to get an appointment. Given that STIs increased by 24% last year alone, what assessment have the Government made of the potential to improve access to sexual health services through the universal provision of postal STI tests in England—something that Wales already offers?

Lord Markham: We are leading the world in all these areas. In a recent survey across the European nations, we came out top in sexual and reproductive health services, which I want on the record. Just last week, everything that we are doing in the HIV space was recognised as part of all this. This is another area in which we are looking to widen access as much as possible. I mentioned the examples of an online service  in Brighton and, to the noble Lord, Lord Hunt, Pharmacy First. We are looking to make sure that access and testing are as widely available as possible.

Lord Turnberg: My Lords, chlamydia is a cause of infertility. A vaccine has been developed and is in use. How far have we got with the programme of vaccination against chlamydia in both boys and girls?

Lord Markham: The noble Lord is correct: about 50% of all cases are of chlamydia, and it is undetectable in a lot of people. That is why we have started screening programmes of chlamydia in women, so that it can be picked up when it has been undetected, which we know can be done. As the noble Lord mentioned, we have a programme of chlamydia vaccinations for both females and males. From memory, I think the rate of boys vaccinated is about 30%, but I will come back in writing with the exact numbers.

Lord Herbert of South Downs: My Lords, the biggest single cause of death of people with AIDS globally is tuberculosis. Coinfection is a real issue. Although this problem is not nearly as serious at home, there are still thousands of cases a year and they have started going up again. Will my noble friend confirm that, post Covid, the Government will look again at what more needs to be done to eliminate tuberculosis—an entirely treatable disease—from our shores?

Lord Markham: Yes, absolutely, as we are in all cases. I want to be clear on this. My noble friend mentioned AIDS: the UN targets are 95%, 95% and 95% for diagnosis, treatment and viral load detection, and we are at 95%, 98% and 98%. We are beating the targets and leading the world on this.

Children Seeking Asylum
 - Question

Lord Scriven: To ask His Majesty’s Government, in the past two years, how many unaccompanied children seeking asylum aged 12 and under have been placed in hotels while waiting for local authority placement.

Lord Gascoigne: My Lords, the well-being of unaccompanied asylum-seeking children is our priority. We maintain that the best place to accommodate these children is in the care of the local authority. From November 2021 to November 2023, 32 unaccompanied children aged 12 and under were temporarily accommodated in hotels, awaiting placement. It is important to clarify that this data has been extracted from live operational databases and is not available in routine published data.

Lord Scriven: I welcome the noble Lord to his new role and wish him well with what will be a very challenging brief. A report last week by the Children’s Commissioner on unaccompanied children seeking  asylum who have been placed in Home Office hotels showed that, while on their way to the UK and once here, 198 reported beatings or assault, 25 reported rape or sexual assault, 34 referred to torture, and there were some indicators of organ harvesting on or before their journey to the UK. However, the Home Office could not confirm that all these children had received healthcare or appropriate safeguarding measures while in Home Office hotels. What will change to make sure that this lack of care and safeguarding never happens again?

Lord Gascoigne: I thank the noble Lord for his kind comments. I am acutely aware of his interest in this area. We should probably thank the Children’s Commissioner for looking into this; I understand that she has written to the Home Secretary, who will respond in due course. The cases the noble Lord raises are obviously distressing, but it is worth saying that the well-being of children continues to be our top priority and we will continue working with other departments to ensure their safety. We will continue to evaluate this and try to make improvements, as we go forward.

Lord Dubs: My Lords, I also welcome the Minister to his new post—it could not happen to a nicer person. What will happen to these children, and some of the older ones, when they reach the age of 18? Is it still the Government’s intention to remove them from the country?

Lord Gascoigne: I thank the noble Lord for his question, and I completely respect his views on this. I am acutely aware that he takes this very seriously and that the whole House listens to him. I can take his points away, but I know that that subject has been well covered in debates in this Chamber and elsewhere.

Bishop of Worcester: My Lords, I join others in welcoming the Minister to his place. I note that Kent County Council announced last week that new arrival centres for unaccompanied asylum-seeking children are being planned in the area but that the council is waiting for funding from central government. As the Minister said, the right and best place for separated children is under local authority care. What is the timeline for the funding to be issued to support Kent County Council fulfilling its statutory duty, especially given that it is responsible for hundreds more children than the prescribed limit under the national distribution system? We do not want to return to the use of hotels.

Lord Gascoigne: I thank the right reverend Prelate for his question. He will have to forgive me, but I missed the beginning of it. I will take it away and make sure he gets a proper response from the department. He is absolutely right to say that local authority care is the right place for the children in question—we have been very clear about that. I know that the Government have provided funding support to local authorities. If he has specific examples where he feels that that has not been done then I will happily take them away. I am sure that the department is already aware of them.

Baroness Butler-Sloss: Is the Minister aware that, according to the Children’s Commissioner, over 5,000 children under the age of 18 were in hotel accommodation between 2021 and May 2023—that is not quite up to date? None of those children was given any safeguarding support. The support apparently came from other people in the hotels and the hotel staff. The question asked by the commissioner, and which I now ask, is this: what on earth are the Government going to do about safeguarding children in the future?

Lord Gascoigne: I thank the noble and learned Baroness for the question. As I have already said, there are lessons to be learned from this. I am sure there are circumstances that noble Lords may be able to give as examples, but the department and the whole of government take very seriously the care, welfare and well-being of these children.

Baroness Chakrabarti: My Lords, I too welcome the Minister to his new role and congratulate my noble friend Lord Dubs on his birthday. What do the Government say to not one but two High Court decisions now holding them in dereliction of their duty to these most vulnerable of children? Exactly how many went missing from hotel accommodation and how many have been found? In his new role, what efforts will the Minister take to find these missing children?

Lord Gascoigne: I thank the noble Baroness for her question. I hope I do not damage her street cred by saying that I am an admirer of hers and that she has always been very courteous to me outside the Chamber—I hope that that continues in the Chamber.
Forgive me, my Lords, but it is worth making the point that this has all been in response to a rise in the number of illegal boat crossings since 2021, to ensure that the well-being of children and others is put first. The situation in the hotels is in response to that rise in numbers. The court case—the judicial review—is something that we are looking at, and we are considering the judgment that has just been handed down. It is worth saying that obviously we take any missing child extremely seriously; there are safeguarding procedures in place to ensure that, in those circumstances, unaccompanied asylum-seeking children are located. Some have gone missing and have subsequently been located. I appreciate this is a long answer but one statistic it is worth giving is that, as of 1 December, there was a total of 472 episodes of missing children, and the total subsequently located was 340; the total number of individuals still missing is 132. This data is sourced from Home Office operational databases and does not form part of our regular statistical outputs, hence why I think there may have been some issues. I hope that by providing it now it is useful.

Baroness Brinton: My Lords, as the right reverend Prelate has said, in September, at the High Court hearing, the Home Office agreed a grant of £9.75 million to help Kent County Council manage the maximum number of children it should have in its care; that was 346. However, it was reported last week that the Home Office has still not agreed the funding  and, worse, that the actual number of children that Kent County Council is looking after is currently 519. When will the Government deliver on their promise, and also ensure that Kent County Council gets the support it needs from the Home Office?

Lord Gascoigne: I thank the noble Baroness for her question. I think it is similar to one I received earlier and I am more than happy to take it away. We will continue to work with Kent County Council to tackle the issue. I do not have the answer in front of me, but I am more than happy to take that away to the department after Questions.

Lord Forsyth of Drumlean: Further to the questions that we have had, would my noble friend not agree that this underlines how important it is for the Government to continue to tackle the criminalised gangs that are responsible for bringing many of these children to this country?

Lord Gascoigne: I thank my noble friend. I agree with most of the things he says, and I think on this he is absolutely right. It is important, as I have said before, to recognise that the hotel situation and the pressures that have been put on local authorities are because of this significant rise in the number of crossings. Let us not forget that. We talk about children, and obviously these are sad circumstances, but this is a result of smugglers who put these children at risk in the first place.

Department for Work and Pensions: AI
 - Question

Baroness Sherlock: To ask His Majesty’s Government how the Department for Work and Pensions is using artificial intelligence and what governance process is in place for such use.

Viscount Younger of Leckie: My Lords, DWP has used forms of AI for some time and we continue to investigate new opportunities. This includes looking at how generative AI can help us deliver high-quality services to improve customer experience and colleague efficiency. We are aware of the transformative benefits of AI, as well as the potential risks. We have created the AI Lighthouse programme to explore opportunities, and we have a framework ensuring that we work safely, ethically and transparently.

Baroness Sherlock: My Lords, this Question has become topical since I tabled it, since the Government have started to take powers to look into the bank account of every pensioner in the country. But that has made me even keener to understand exactly how DWP is using AI. Can the Minister tell the House whether it is used to select people for health reassessments,  or to decide who to investigate or who to sanction? If so, what safeguards are in place to ensure that it is used transparently and fairly? How do we avoid it becoming a sort of digital version of stop and search?

Viscount Younger of Leckie: I hope I can reassure the noble Baroness that we already have a proven track record in delivering technology in a responsible and well-governed way. We have extended our governance to include an AI steering board and an assurance and advisory group. DWP always ensures that appropriate safeguards are in place for the proportionate, ethical and legal use of data, with internal monitoring protocols adhered to. I further reassure her that the Cabinet Office’s Central Digital and Data Office has recognised our Lighthouse programme’s safe acceleration framework as an exemplar for AI development in government.

Baroness Buscombe: My Lords, given that the DWP’s proposed total expenditure for 2023-24 is a staggering £279.3 billion, can my noble friend tell the House whether this use of AI will contribute and is contributing to cost efficiencies within the department?

Viscount Younger of Leckie: I can reassure my noble friend that it will. I shall give a bit of granular detail: a 2021 DSIT report highlighted the potential impact of AI on the UK labour market, and this of course includes DWP. Automation is forecast to increase, rising from an estimated 7% to 30%, but I can reassure my noble friend that, with the changes, there will be a net gain. We have an average of about 900,000 employees per quarter moving from one job to another, so I can reassure my noble friend that my department’s employees will reduce, but there will be opportunities for those in AI.

Lord Palmer of Childs Hill: My Lords, as the Minister said, the Government are rolling out massively complex new systems, with significant risk to claimants because they have not got their original systems in order. We hear constant reports of backlogs at the Future Pension Centre, payments for national insurance credits being lost within the system and more and more historic pension errors coming to light when it comes to things such as home responsibilities protection. Can the Minister update the House on the steps to get those existing systems in order and on what learning exercises will be carried out to ensure that no such errors will be carried forward on the new and potentially more powerful systems that he has outlined?

Viscount Younger of Leckie: We are certainly working very hard to look at and mitigate delays, and AI will over time be a game-changer for that. To manage and mitigate risk, we have produced a risk framework, in line with the Department for Science, Innovation and Technology. We are setting out AI governance and an approach to AI enablement which will be transformational.

Baroness Lister of Burtersett: My Lords, I shall pick up on what my noble friend said about digital stop and search, because there is growing concern  about the potential for hidden bias in the use of algorithms to detect social security fraud. What steps has the DWP taken to prevent such bias, with potentially discriminatory outcomes?

Viscount Younger of Leckie: The noble Baroness raises an important point. We are committed to building trust in our use of AI and are fully aware of the risks of the technology, as discussed at the UK AI safety summit. Where AI is used to assist its activities in the prevention and detection of fraud within UC applications, DWP always ensures appropriate safeguards, and bias is something we are very alive to. It will very much depend on the input of data and we have some risk profiles in place to ensure that we adopt best practice in that respect.

Lord Bellingham: My Lords, given the appalling amount of fraud within the DWP, costing billions per year, surely we should welcome the fact that DWP is using AI and algorithms to target this problem. The key is presumably that, once AI has reached a conclusion, actual human beings should review the situation. Can the Minister tell the House whether the DWP has robust internal quality assessment procedures?

Viscount Younger of Leckie: There are couple of questions there. We continue to explore the potential of AI in combating fraud. This includes the integrated risk and intelligence service, using AI to assist in identifying possible fraud in processing universal credit advances. To answer my noble friend’s question, importantly, DWP does not use AI to replace human judgment when considering the potential for incorrectness to either determine or deny payment to a claimant. The NAO and the ICO looked at this issue recently and found no areas of immediate concern.

Baroness Jones of Whitchurch: My Lords, the issue that my noble friend raised about access to millions of people’s bank accounts came up at a very late stage—Report—of Commons dealings with the Data Protection and Digital Information Bill. Can the Minister outline why such contentious measures were introduced only after the line-by-line consideration of the Bill in the elected House? Why did the Government refuse the Opposition’s request that the legislation go back to Committee, as did the Online Safety Bill in the last Session? Can the Minister justify why this very contentious piece of legislation is being rushed through?

Viscount Younger of Leckie: I will not be drawn into answering questions on that, but I can say that it is important that the scrutiny of the Bill is done in an effective way and, of course, this House is very good at doing that. As I have mentioned before, it is very important that there is trust in AI solutions; this must be a prevalent issue among all users of AI.

Lord Bird: Will this AI enable people who are on social security to get a better deal and get off social security, so that we can tap into the skills and abilities of millions of people who are caught in the Bastille of poverty and social security?

Viscount Younger of Leckie: Yes, and I can outline that a lot of very good work has been done so far. As I said earlier, the work still has to include human judgment, but AI is being used to assist with improving on repetitive processes for staff. We are introducing conversational platforms for triaging, which will lead directly to having a human face. The whole point is to speed up the process and include more human judgment in ensuring that more people get into work, and faster.

Lord Brooke of Alverthorpe: Has the Minister seen the Paradot website? If not, will he look at it? Is the department examining whether the buddy concept developed there could be used in the department that he represents and in other government departments, and what the consequences of using that in government service would be?

Viscount Younger of Leckie: I am not aware of that, but I will most certainly look at it.

Lord Scriven: Can the Minister say what percentage of staff within the department are fully skilled and trained on the use, application and assessment of AI decisions?

Viscount Younger of Leckie: I will need to write to the noble Lord with those specific figures.

Lord Harris of Haringey: The Minister has said repeatedly that he wants the public to have trust in the use of AI in the system. Can he therefore tell us what proportion of cases where AI has been used are subsequently checked by a human? Will he publish the results of that analysis to show whether the AI decisions are the same as human decisions, or perhaps better, or worse?

Viscount Younger of Leckie: I can give the noble Lord some reassurance on the processes that we have in place. AI is an evolving, iterative process and it is important to highlight the fact that we have a test- and-learn approach. We must proceed with extreme caution in what we are doing. Test-and-learn means that we need to get to a point where we are assured that this will work and that nobody will be affected detrimentally. Then we can accelerate our programmes.

Cancer Research UK Report
 - Question

Baroness Ritchie of Downpatrick: To ask His Majesty’s Government what assessment they have made of the report Longer, Better Lives: A Manifesto for Cancer Research and Care, published by Cancer Research UK on 28 November, regarding their priorities for investment in clinical research and innovation.

Lord Markham: The Government welcome the Cancer Research UK report Longer, Better Lives, which rightly highlights progress made against cancer. We have invested over £100 million in cancer research in 2021-22 through the National Institute for Health and Care Research. We are working closely with research partners in all sectors, and I am confident that the Government’s continued commitment to cancer research will help us to build on that progress, leading to continued improvement for all cancer patients.

Baroness Ritchie of Downpatrick: I thank the Minister for his Answer. The CRUK manifesto clearly highlights the priorities required for tackling rising cancer rates with a growing ageing population, including the need for more investment in research, greater disease prevention, earlier diagnosis through screening, better tests and treatments, as well as cutting NHS waiting lists and investing in more staff. Can the Minister outline what steps the Government will take to implement this strategy, allied with resources and updated infra- structure in all hospitals?

Lord Markham: Absolutely. I thank the noble Baroness for the work that she does in this field. I welcome the manifesto, specifically on rebuilding the global position in research. We have done a good job on that: we have gone from a position of 26% of the clinical trial responses being in time to international standards to over 80%. The biggest prevention method that anyone could take is to stop smoking because, as we know, that is the biggest cause of lung cancer, so we are introducing steps to prevent smoking. On early diagnosis, we have introduced an excellent example in lung cancer. Some 60% of people used not to be detected until they were stage 4, which is often too late. Now, through the mobile lung cancer units, we are detecting 70% at stage 1 or 2, where they have a 60% chance of survival. Across the field, we are doing a lot on this that we can feel proud of.

Lord McColl of Dulwich: My Lords, does the Minister recognise that one of the causative factors of cancer is obesity? Some 40 million people in this country are obese, and according to the latest estimate it is costing £100 billion a year. Is it not time to adopt the campaign technique that Norman Fowler—now the noble Lord, Lord Fowler—successfully conducted in the 1980s? He had the courage to state the truth and make sure that it was successful.

Lord Markham: Yes, we are taking extensive action on the obesity front. As well as being a major cause of cancer, it is the cause of a lot of ill health. We have taken a lot of action against 96% of the reasons given in obesity research on calorific intake, with regard to what people buy in supermarkets. Also, the soft drinks industry levy—the sugar tax—has decreased sugar in drinks by at least 14%.

Lord Patel: My Lords, I congratulate CRUK on producing this magnificent report and manifesto. Continuing with the theme of research, the report  identifies the necessity of further closing the funding gap in research of about £1 billion in the next decade. This research is in key areas where our scientists are leaders in the world, such as the early detection of cancer using cell-free DNA and technologies such as messenger RNA for vaccine production, using genomes and early protein expressions for early diagnosis. The Minister mentioned the key area of reducing lung cancer using known technology, but it is in discovery science where we need to increase funding, especially when government funding falls far behind charity funding, particularly from CRUK.

Lord Markham: I agree that research funding is key. That is why I mentioned the £100 million that we spent in 2021-22. The Medical Research Council is also spending £125 million per annum on cancer research. That is allowing us to introduce vital things such as the point-of-care cancer treatments that our regulators that have brought in ahead of anyone else in Europe, showing the key flexibility that our regulators now have, meaning that people can have individualised cancer care. I agree that we need to invest in these sorts of activities.

Lord Allan of Hallam: My Lords, I recently had a meeting at one of our excellent specialist cancer hospitals. It explained that it had tens of millions of pounds in the bank that it would like to spend on facilities and equipment to support new cancer treatments, but it cannot. The only blocker is that it cannot get a certificate from the local integrated care board to authorise the capital expenditure. Frankly, I was astonished by that. I invite the Minister to explain, in terms that even I can understand, why the Government think it a good idea to prevent a world-leading hospital trust from spending money that it already has on much-needed cancer research facilities.

Lord Markham: I am not clear on the details of the case but will happily take it up with the noble Lord afterwards. I agree that, clearly, we want our leading institutions spending money where they can really impact change, and that is exactly what we are doing.

Baroness Merron: My Lords, while any benefits of early cancer diagnosis will not be realised without timely treatment, the Government continue to not nearly meet the NHS target of 85% of patients starting treatment within 62 days of an urgent referral for suspected cancer. What assessment have the Government made of treatment delays on death rates, as well as anxiety levels for patients? If the Minister accepts the statistics that increased waiting lists for cancer treatment predate the pandemic, what will the Government now do differently?

Lord Markham: We absolutely need to bear down on cancer wait times. That is why we have been expanding supply in this area: the 130-plus CDCs, which have done 5 million tests, are all about that, as are the 50 surgical hubs. This means that we are treating 26% more cancer patients this year than last year and that we have managed to reduce the 62-day backlog by 27%. More work needs to be done, but we are getting on top of it.

Baroness Armstrong of Hill Top: My Lords, the problem that the Minister faces is that things may well be getting worse. Because of the extensive waiting lists, one major cancer centre in London is saying that the number of people referred to the cancer pathway has rocketed, because of a large number of people on other waiting lists. Among those that it is now seeing for the cancer pathway, only 2% actually end up having cancer. At one level we can celebrate that, but we know that it is not because the numbers with cancer are reducing. People are being referred into the pathway because it is the only way that they will be seen at the moment.

Lord Markham: No, I do not believe that is why people are being referred; it is to give them peace of mind. People know their own bodies and, if they are concerned about having cancer, they know that we want to put their minds at risk. I am familiar with that statistic. I had heard that 95% of people who go to these referrals, thankfully, do not end up with cancer but, boy, do they have peace of mind since we are able to give them that assurance.

Lord Harries of Pentregarth: I declare an interest, as I have a son who is an oncologist. As the Minister knows, one of the most serious forms of cancer—and growing at this time—is melanoma. The melanoma charities are campaigning to reduce the VAT on sun cream in order to reduce the incidence of this terrible cancer. Have the Government come to a view on this reduction of VAT?

Lord Markham: I do not think that the Government have come to a view but I understand the point. I will take that back to the department and the Treasury.

Lord Turnberg: My Lords, we are doing reasonably well with certain cancers—leukaemias and breast cancer—but very badly with pancreatic cancer and colon cancer. Most of these are asymptomatic for a long while, until it is too late. We desperately need a test that will indicate that there is a disease coming. What research is being done in this area and what money is being spent on it?

Lord Markham: The noble Lord is absolutely correct that, while we have made good progress in many areas, pancreatic cancer is the hardest one and one where we need to do more. That is true all around the world, because the symptoms are so hard to detect. I will happily write with the details to give him an answer on that.

Ukraine: Humanitarian and Economic Support
 - Question

Lord Robertson of Port Ellen: To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what additional humanitarian and economic support he is providing to Ukraine.

Lord Cameron of Chipping Norton: My Lords, since February 2022, we have committed over £4.7 billion in humanitarian and economic support to Ukraine. This year, the UK is providing $1 billion of support to Ukraine’s budget, through loan guarantees, and £127 million of humanitarian support for Ukraine and Moldova. During my recent visit to Ukraine, I announced further support for Ukrainians directly impacted by the invasion: £10 million for the Ukrainian Red Cross Society, to provide medical supplies, and £7 million to volunteer organisations delivering humanitarian assistance. We will continue to support Ukraine for as long as it takes.

Lord Robertson of Port Ellen: My Lords, I thank the Foreign Secretary for his Answer and I refer to my entry in the register of interests. Can I say how much we all welcome him here for this first monthly interrogation in the House of Lords, which I am sure he is likely to enjoy? After all, his very presence in this Chamber has given a fillip to those of us who have to go around saying “Do you know who I used to be?”
I commend him for the fact that his first visit as Foreign Secretary was to Ukraine. The Ukrainians are not just fighting for their country, their land and their lives; they are also fighting very much for us. Surely, they do not need more visits and speeches but more weapons, guns and more ammunition, and they need more equipment. In that context, why was there no additional military aid offered in the Chancellor of the Exchequer’s Autumn Budget? Why is there no perspective on military aid for 2024, when the 2023 money is going to run out in a few weeks’ time—in March next year?

Lord Cameron of Chipping Norton: I thank the noble Lord for his question. I absolutely remember not only who he is but who he used to be. He was an incredibly effective Secretary-General of NATO and did fantastic work. It is worth recalling some of the things he said to President Putin back in the day in 2002-03, which are very relevant today. To answer his question directly, I think we have given £4.6 billion of military support. We will continue to give the support that is necessary.
One of the things I found very impressive about going to Ukraine was how much they rate our support. They refer to us as their number one partner. It has been very good to see that. The one area where we can do more is in trying to mobilise the British defence industries to produce the stocks that are needed, rather than simply running down stocks. We can also work with European allies. Sometimes, if they are reluctant to give support, they may be able to backfill some of our capabilities and we can give more. I am absolutely clear that the military support is essential; that is what is helping Ukraine to succeed.

Lord Cormack: My Lords, I join the welcome to my noble friend and wish him every possible success. Does he share my concern at the slowing up of the counteroffensive in Ukraine? Will he make it a particular  study of his to see what can be done to increase the weapons supply so that these brave people who, as the noble Lord, Lord Robertson, said, are fighting for us, succeed?

Lord Cameron of Chipping Norton: I thank my noble friend for his question. I well remember when we were on the campaign trail together in Staffordshire. He was rather more successful: he fought South Staffordshire; I fought Stafford, and Stafford fought back rather effectively at the time.
I think we should be clear about the success the Ukrainians are having. It is not much remarked upon. Of course, the land picture is one thing, but what has happened on the Black Sea is that the Ukrainians have pushed the Russian navy right back across the Black Sea, sinking a number of their ships and opening up a grain corridor for ships. That is essential, because ultimately we need the Ukrainian economy to grow. Ships are now sailing, exports are moving and the economy is growing. They destroyed about one-fifth of Russia’s attack helicopters in one night recently. So, yes, there has been a difficult picture on land, but overall big success. Combined with the fact that this country is now knocking at the door of both NATO and the EU, that is a very positive picture for Ukraine, and it is important we get it across.

Lord Newby: My Lords, I welcome the noble Lord to his position and to your Lordships’ House. It is clear that, whatever the outcome of the war, economic support on a considerable scale will be needed in Ukraine for many years to come. This has to be an international effort led by Europe, and if there is to be a co-ordinated European response, the UK has to be at the heart of it. What institutional framework involving the EU and UK does the noble Lord propose to ensure that economic support is provided in the most efficient and effective way?

Lord Cameron of Chipping Norton: I thank the noble Lord for his question. There are two answers to that. One is the EPC, this new body that brings together EU members with other European countries, including the United Kingdom. That is a good forum in which to talk about our support for Ukraine. The other is the Ukraine Recovery Conference that we hosted here in June, which will be a regular fixture—other countries will host it—and brings together everybody to make sure that we maximise the economic support. It marshalled something like $60 billion of economic support for Ukraine. So there are ways in which to make sure that we combine effectively with European partners and others to get this essential assistance in place.

Baroness Meacher: My Lords, in answer to the question from the noble Lord, Lord Robertson, about what the Government are committing in the way of weapons to Ukraine for 2024, the Foreign Secretary made lots of nice phrases and comments—but could he actually answer the noble Lord’s question? What commitment can he make to what weapons there are and how much we are spending on weapons for 2024 for Ukraine?

Lord Cameron of Chipping Norton: I thank the noble Baroness for the question. I do not have the figure for what 2024 will provide. All I can say is that we are absolutely committed to continuing to support Ukraine at the level or even ahead of what we have done. To be clear about this, it is not just the scale of support; it is the type of support. One thing that the UK has done—and I pay tribute to my successors as Prime Minister in this—is to be always ahead of the game. Lots of people were worried about giving them NLAW anti-tank missiles, but we went ahead and did it—then others did. Lots of people were worried about giving support in terms of tanks; we did it, and others followed—and the same again with long-range artillery and, crucially, the same again with Storm Shadow missiles, or so-called long-range fires, which have made such a difference right across the battle space. We will continue to support them at that level, asking them what it is they most need and making sure that our support is effective.

Lord Collins of Highbury: My Lords, I reiterate, as I have done before, our full support for the Government’s actions, militarily and economically and in terms of humanitarian support for Ukraine. The noble Lord said that we must remain ahead of the game, and one clear thing that we need to ensure is that the Government who have caused this war pay for the rebuilding of Ukraine. Of course, the EU has already set out a plan to repurpose Russian frozen assets; Canada has passed laws to do it; and the US has drafted laws to do it. When will we see this Government act, and not be behind the game?

Lord Cameron of Chipping Norton: I thank the noble Lord for his question. It is an extremely important point, and it is one of the things that I have looked at since taking office. I am going to Washington this week and will be discussing that specific point with my counterparts in the United States. To me, it is clear that this is confiscated money; it should be taken away from the Russians who possess it and should be used as a downpayment now—instead, as it were, of reparations coming later. Of course, there are all sorts of legal concerns and all sorts of concerns about precedent and chilling effects on investment and the rest of it. But I am with the noble Lord on the moral and emotional stance—that this is the right thing to do. Let us see if we can get it done.

Bishop of St Albans: My Lords, could the Minister comment on his department’s assessment of reports that not only has Turkey vastly increased its trade with Russia but that Turkish ports are being used for arms smuggling and, in some cases, exporting dual-purpose goods into Russia, thereby helping Russia? I wonder what the assessment is, and what we might be able to do about that.

Lord Cameron of Chipping Norton: I thank the right reverend Prelate for his question. He is absolutely right: one thing that we have to do is to look right across the world at where there is potential for countries exporting dual-use goods and other goods of concern to Russia so they can build more weapons and drones  and all the rest of it. He is absolutely right that there are concerns about Turkey, and I raised those specifically with the Turkish Foreign Minister when I met him recently at the NATO conference. There are also concerns about other countries, and I can tell him and all noble Lords that we are going though it country by country and concern by concern, trying to track down where those dual-use goods are coming from and trying to take the appropriate measures, including sanctions, when necessary.

Belarus
 - Question

Lord Foulkes of Cumnock: To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what action he is taking, bilaterally and multilaterally, to put pressure on the government of Belarus (1) to restore democracy, and (2) to release political prisoners.

Lord Cameron of Chipping Norton: My Lords, the UK’s position is clear: the Belarusian regime must release all political prisoners immediately and unconditionally and ensure free and fair elections. The UK has led international pressure on Belarus. We cofounded the International Accountability Platform for Belarus to build the evidence of the brutal repression that the regime is responsible for; we have sanctioned over 100 individuals and entities for human rights violations; and we cosponsored UN resolutions and investigations at the OSCE in Vienna to shine a spotlight on human rights in Belarus.

Lord Foulkes of Cumnock: My Lords, I am grateful to the Foreign Secretary for that Answer, as far as it goes, but we must never forget that Lukashenko and his regime supported the Russians in the illegal invasion of Ukraine. They have imprisoned over 1,500 people, including Stepan Latypov, who I have adopted under the Libereco adoption scheme, and those prisoners have no immediate prospect of release. Meanwhile, Lukashenko’s cronies are going around the world acquiring assets freely. The UK Government have said over the last two years that they are going to impose more individual sanctions on the Lukashenko cronies, but nothing has happened. Will the Government now look at increasing the sanctions to make sure that pressure is put on the Lukashenko regime?

Lord Cameron of Chipping Norton: I completely admire what the noble Lord has done to keep the spotlight on Belarus and the work that he and others on the all-party group have done; it is hugely to his and the House’s credit. We have sanctioned 182 individuals and entities. We keep looking at what more can be done. We never announce potential names or sanctions before we do them, for obvious reasons, but we keep it under review. I am looking at it very carefully. The noble Lord is right, and we should be clear: this is Europe’s totalitarian regime. They randomly confiscate people’s mobile phones to see who they have been  contacting and what social media they are following. Trade unions have been dissolved and their leaders imprisoned. Waving a Ukrainian flag is against the law and can result in a jail sentence, and there are 1,500 political prisoners, so we absolutely agree with the aim of the noble Lord’s Question and we will keep using the sanctions and other tools as appropriate.

Lord Purvis of Tweed: My Lords, I also welcome the Foreign Secretary to his position and I agree with him as regards the Belarus regime. I remind him of what he said in his famous immigration speech. He said that by introducing a new visa,
“we are rolling out the red carpet to those”
who offer serious investment to the UK. We now know that a number of Belarus businesspeople bought a large proportion of London property as a result of this golden visa route. I have supported every Belarus sanction that we have debated in this House, but there is nothing in the Government’s new development White Paper that offers any new support for human rights defenders or democracy activists within this conflict. Why is that? Can the Foreign Secretary reassure me that of those 182 individuals he mentioned not a single one continues to enjoy UK preferential visa access?

Lord Cameron of Chipping Norton: I make the point to the noble Lord, who asks an important question, that yes, of course, we introduced entrepreneur visas to try to attract bright talent to the UK to help to grow the economy, but that does not mean that we should give visas to people who have come by that money wrongly. One of the things I did as Prime Minister was to announce the London property register which is now coming in and will make a huge difference by confiscating people’s ill-gotten gains and returning them to the countries and the people from which they came so they can benefit. On the noble Lord’s specific question, I am very happy to take that away and look at it more, but it is important to recognise that we use the sanctions, we will keep using the sanctions, and we are watching closely what Belarus is doing.

Baroness Kennedy of The Shaws: My Lords, I also welcome the Foreign Secretary to his new role. I am glad to hear of his concern about political prisoners and the use of sanctions against those responsible, largely, for their being incarcerated. In that context, I raise the fact that Lukashenko is currently visiting China and President Xi. I am concerned as to whether we are making the same efforts in relation to the sanctioning of those responsible for imprisoning people; for example, in Hong Kong using the National Security Law. Jimmy Lai is there in prison, facing trumped up charges and he was a voice for democracy in Hong Kong. In the short period since he has been in office, has the noble Lord got to know about Jimmy Lai and is he raising his incarceration?

Lord Cameron of Chipping Norton: I thank the noble Baroness for her question. Yes, I am aware of the case of Jimmy Lai. It is very important that we raise such cases in interactions with the Chinese Government and that is exactly what I have done.

Baroness Smith of Basildon: My Lords, perhaps I may bring the Foreign Secretary back to sanctions, as raised by the noble Lord, Lord Foulkes—I am also a godparent to one of the political prisoners in Belarus. I think that the Foreign Secretary will be aware of concerns about the loopholes that have been exposed in the sanctions. I think the House would like to know whether he is confident that, having identified them, the Government will be more effective in monitoring and enforcement. The sanctions will not be effective if they are not properly enforced and monitored and there will be very little point. Is he confident of their effectiveness? If not, what measures will he take to improve the position?

Lord Cameron of Chipping Norton: I thank the honourable Lady for her question—sorry, the noble Baroness; I will get there eventually. I have not asked the Foreign Office for a specific analysis of the weakness of the sanctions, travel bans and asset freezes that we put in place, but I am very happy to do so and see whether there are ways in which the system is not working. We must sense-check all these things. The International Accountability Platform for Belarus sounds like a terrible set of initials, but it is about making sure that we support all the NGOs and others in looking at all the human rights abuses in Belarus so that they are properly charted and written down and may be able to form the criminal case against people working in that regime in future. It is important to do that. I certainly take away the point made by the noble Baroness.

Lord Kerr of Kinlochard: The Foreign Secretary will be aware that President Lukashenko and President Putin are the only members of an exclusive club of leaders whose countries do not recognise the jurisdiction of the European Court of Human Rights. Does he share the view of the former Home Secretary that we should join that club?

Lord Cameron of Chipping Norton: I can point the noble Lord to speeches I made as far back as 2005 saying that we must always put our national interest first, whether in the need to deport dangerous terrorists or to have an immigration policy that works for our country. I believe that is consistent with remaining in the ECHR. However, as I found when Prime Minister, there are occasions when the ECHR makes judgments as it did on prisoner votes. It said that it was essential that we legislated instantly to give prisoners the vote; I said that I did not think that was the case and that it should be settled by the Houses of Parliament. The ECHR backed down. That sort of flexibility may well be necessary in future.

Lord Bellingham: My Lords, the Foreign Secretary will be aware that the incredibly evil and vile Wagner Group was allowed to move to Belarus after the mutiny in Russia was resolved. Does he share my concern about this? Will he raise this with the US Secretary of State when he sees him next week?

Lord Cameron of Chipping Norton: My noble friend is absolutely right. Belarus has been the No. 1 supporter of Putin’s illegal invasion of Ukraine and it  should be held to account for that. I am certainly happy to raise that with Secretary Blinken when I see him this week.

Lord Allan of Hallam: My Lords, I take the Foreign Secretary back to a previous answer he gave about the property register, which is a very important step forward in understanding whether corrupt individuals from Belarus or elsewhere are buying property in the UK. He may be aware of concerns that people can still hide behind beneficial trusts. As Foreign Secretary, will he work with his colleagues in government to try to get us to the next stage of transparency so that corrupt individuals cannot buy property and hide their ownership?

Lord Cameron of Chipping Norton: I thank the noble Lord for his question, which I am very happy to take away. The Government I led and this Government have made progress on that. As he said, we have the register of property. A number of properties have been taken back from their owners and that money has been returned to the countries from which it was stolen. Added to that, we have the registers of beneficial ownership, including the public registers of beneficial ownership that I announced at the G8 in 2013. We are making huge progress on that globally and with our overseas territories. We need to do the same with our Crown dependencies. All this is essential if we are to fight corruption.

Taliban Relations and Afghan Refugees
 - Question

Baroness D'Souza: To ask the Secretary of State for Foreign, Commonwealth and Development Affairs whether he has plans to develop formal relations with the Taliban, and whether he has made representations to the Government of Pakistan about the deportation of Afghan refugees.

Lord Cameron of Chipping Norton: As the noble Baroness knows, the situation with respect to Afghanistan is very difficult. My officials engage with the regime on priorities, including humanitarian access, without conferring any legitimacy on the Taliban. We are reviewing the recommendations of the UN special co-ordinator’s report to support the Afghan people and improve international relations. Specifically on the question of Pakistan’s deportation of Afghan refugees, we do not support these actions. I met with the Pakistan Foreign Minister on Friday, in Dubai, and raised this question with him. Pakistan has a history of welcoming vulnerable refugees, and we will continue to urge its Government to respect the human rights of all Afghans.

Baroness D'Souza: I thank the Foreign Secretary for his Answer. The lack of recognition of the Taliban authority has inadvertently provided the Taliban and  Pakistan with unrestricted freedom and influence over policies in Afghanistan. The current concern, as the noble Lord pointed out, is the enforced resettlement of thousands of refugees from Pakistan to Afghanistan. The Taliban policy of relocating Shia minorities in Sunni areas has dangerous implications. What measures, including further negotiations with the Pakistan Government, can the UK Government take to avert potential religious and other conflicts in the region?

Lord Cameron of Chipping Norton: I thank the noble Baroness for her Question and her deep interest in this subject. I think the reason the Pakistan Government are doing this is that they are concerned about the activities of the Pakistan Taliban within Afghanistan, and this is their way of trying to get the Taliban Government to address that. One of the points I made to them is that that might well be counter- productive and we think this is the wrong move. We will continue to raise this with the Pakistan authorities at every level and on every occasion. Obviously, we have a specific British interest to make sure that any Afghans who worked for our authorities in Afghanistan, and who have a right to come and settle here under either of the two schemes we have, are not inadvertently pushed back into Afghanistan. That is our number one concern.
On the issue of the regime and recognition, I am sure there will be other questions about this, but, fundamentally, as the House knows, the Foreign Office always says that we recognise states and not Governments, which I know is right. However, on this occasion, when you look at this regime and what it is responsible for, you see that it bans women from working for the United Nations; it is the only country in the world to ban girls from secondary school; it restricts women’s access to parks, playgrounds and other public spaces; and it has a complete ban on women attending university. We are some way off moving to recognise this regime. We need to keep the pressure on for it to change its approach.

Lord Browne of Ladyton: My Lords, the Foreign Secretary may recall when he was Prime Minister meeting members of Afghanistan Commando Force 333, a counternarcotics unit that later became a counter- insurgency unit, which was created, trained, mentored and funded by His Majesty’s Government. He will be appalled to know that former and deserving members of CF 333, and the similarly created and funded ATF 444, were wrongly refused resettlement under the ARAP process. Abandoned, several have been killed and/or tortured. About 100 CF 333 and ATF 444 applicants were rejected and are in Pakistan, fearing imminent deportation and a death sentence. Will the Foreign Secretary agree to meet with me and a delegation of noble Lords and noble and gallant Lords and Baronesses so that we can explain the compelling case for an urgent review of the rejected or rescinded approvals of their settlement applications?

Lord Cameron of Chipping Norton: I thank the noble Lord for his question. Of course, he has great experience of this, having been the Defence Secretary for a prolonged period when we were in that fight in Afghanistan, and he knows exactly about the  issues he raises. I am very happy to take away the point he makes about those two units and to look at them specifically. Under the Afghan relocations and assistance policy—the ARAP scheme—I think 12,200 people have been repatriated so far. Of course, the Foreign Office scheme, for which I am responsible—the Afghan citizens resettlement scheme—has the capacity for up to 20,000 people. I am very happy to take away the specific points that he makes and see what we can do to help.

Baroness Hodgson of Abinger: My Lords, after 9/11, when the West went into Afghanistan, we encouraged the women to come forward and play their part in public life, and they bravely responded. As my noble friend just said, since the Taliban came in in 2021, they have stopped women having access to education and basically pushed them back into their homes. Many are calling this gender apartheid. How will we ensure that the women of Afghanistan can play their part in their country, going forward?

Lord Cameron of Chipping Norton: I thank my noble friend for her question. It is appalling how women are treated in Afghanistan. I gave some of the points earlier about access to school, education and university, and even to public spaces. We have to use the maximum leverage that we have. Of course, while we need to help people in Afghanistan who are facing great food insecurity and huge difficulties around shelter and livelihoods—and we are helping—we can do that through United Nations organisations, rather than through the Government of Afghanistan. We should continue to do that and use the pressure that we have to say to the regime that it needs to change its ways with respect to women and girls.

Baroness Smith of Newnham: My Lords, the Foreign Secretary has already mentioned that there is a danger of people in Pakistan who have ARAP entitlement being sent back to Afghanistan, and a hope that we can persuade Pakistan not to let them go back. Could he show the House the Government’s commitment to people who have ARAP entitlement, or ACRS entitlement, and talk with his right honourable friends in the other place the Home Secretary and the Secretary of State for Levelling Up, and the Cabinet Office, about ensuring that every single person who has ARAP entitlement is able to come from Pakistan or Afghanistan to this country? We owe those people; what are we doing?

Lord Cameron of Chipping Norton: The noble Baroness is completely right; this is a cross-government effort. We have to make sure we identify these people, contact them and let them know about their right to come and live here. Then we have to work out, across the different departments of government, how to make sure that can happen in a way that works for them and their families. I can tell her that that is exactly what is happening in government at the moment.

Lord Collins of Highbury: My Lords, the noble Lord just mentioned the ban on UN aid workers in Afghanistan. I am glad to see the noble Lord,  Lord Ahmad, here; in January, in response to an Urgent Question, he stressed the need for the Islamic world to speak out. I welcome very much the Foreign Secretary’s recent discussions with the Pakistan authorities, but what is he doing to support the noble Lord, Lord Ahmad, in ensuring that we expand that to ensure that other voices are heard condemning this isolated regime banning women from attending hospitals and other humanitarian support? It is incredibly damaging.

Lord Cameron of Chipping Norton: From what I have seen in the last three weeks, I know that my noble friend is incredibly active in his travels, particularly around the Middle East, north Africa and much of the Muslim world. He is an incredibly effective spokesman for the Government in trying to make a change on these issues. One of the things that is necessary is to make sure that those states which often privately speak very frankly about these things make it part of their public narrative. The work we do on that will be really essential.

Baroness Coussins: My Lords, now that the Government have helpfully dropped their requirement that suitable housing in the UK be secured before Afghans may travel from Pakistan to the UK, and returning to what the Foreign Secretary described as his number one priority, how many UK visas have been issued since the policy was reversed on housing requirements to those Afghans trapped in Pakistan who qualify under one of the two main schemes that we initiated?

Lord Cameron of Chipping Norton: I thank the noble Baroness for her question. I do not have the figures since that change, but the overall figures are that ARAP has seen 12,200 people repatriated and the ACRS has a capacity of 20,000. Perhaps I can keep her and the House up to date about the figures as they progress. We are doing everything we can to contact those people on the Pakistan-Afghan border, but at the same time it is important to make it clear to the Pakistan Government that it would be unacceptable for them to deport anybody who has the right to come here.

UK-EU Relationship
 - Question

Baroness Hoey: To ask the Secretary of State for Foreign, Commonwealth and Development Affairs what discussions he has had with the European Union about the future development of the UK-EU relationship.

Lord Cameron of Chipping Norton: My Lords, last week I met with Vice-President Šefčovič. We discussed issues including the Windsor Framework, and support for Ukraine and the Middle East. An important part of my role is to  make the UK-EU relationship work to deliver on UK interests, including on migration, energy security and trade. The trade and co-operation agreement remains the basis of our relationship with the EU and we are committed to maximising its opportunities.

Baroness Hoey: My Lords, I welcome the noble Lord very much, particularly because I know he is committed very strongly to the union of Great Britain and Northern Ireland. He is also the only member of the Cabinet who has not had anything to do with either the protocol or the Windsor Framework, so he comes with clean hands. I hope that he understands the difficulties that the Windsor Framework is causing to people in Northern Ireland, with businesses not sending goods to Northern Ireland any more and the break-up of the internal UK market. Can he give a commitment to the people of Northern Ireland that, when he next meets with the European Union, he will actually talk about alternatives that could be brought forward, with modern technology, trust and common sense, that could do away with the Irish Sea border and not divide our country?

Lord Cameron of Chipping Norton: I thank the noble Baroness for her question. It is very nice to be reunited with her. My first job in politics was as the candidate’s researcher at the Vauxhall by-election, where she got elected and my office was picketed every day by local residents. At least we have ended up in the same place.
As the noble Baroness said, I had nothing to do with negotiating the Windsor Framework, so I can say with real feeling that I think it was a superb negotiation. The EU said it would never reopen the withdrawal agreement and it did; it said it would never give an emergency brake, yet it did when it came to Stormont; and it never really makes exceptions for single market access for non-single market countries, yet it has. I absolutely understand her concerns and worries about it, but I think it was a good negotiation. I think it can fulfil the seven tests that the Democratic Unionists have put forward. I know that my right honourable friend the Secretary of State for Northern Ireland is working extremely hard to try to put the institutions back together again.

Baroness Hayter of Kentish Town: My Lords, the Foreign Secretary mentioned that one of the areas of common interest was migration. Given the signing of the treaty with Rwanda today, can he tell the House what discussions he had with the EU and its member states on that? Can he also tell the House whether Parliament will have the choice to debate and agree that new treaty?

Lord Cameron of Chipping Norton: One of the things that has changed the most in my seven-year absence from all this is that the debate in EU countries about migration has completely changed. Many more of them are extremely worried about the scale of illegal migration and the need to do some quite creative thinking about how to deal with this problem. I did speak about this with Commissioner Šefčovič. I fully support what the Government are doing because we  have to stop these illegal boat crossings. There is nothing more destructive to a country’s immigration system than to have a continued and very visible amount of illegal migration. The approach that is being taken is to break the criminal gangs and their ability to say to people, “We will get you to the shore of the UK, and from then on you are safe”. We have to stop that, and that is what the Rwanda plan is all about. I am sure it can be debated to a great extent in this House, and I am sure that my colleagues would be very happy to take part.

Earl of Kinnoull: My Lords, the trade and co-operation agreement contained a structure of 24 committees to assist the process and trade. Following the Windsor Framework agreement, the European Affairs Committee of this House produced a report about the future of the relationship between the UK and the EU. I hope that the Foreign Secretary will have a chance to read that report. One of its key themes was getting these 24 committees really humming, meeting—and their structures meeting—and transacting so that there could be mutual benefit to both sides in improving the trading relationship. Can the Foreign Secretary give us a sense of whether that is now happening, and of his determination to keep it going?

Lord Cameron of Chipping Norton: I thank the noble Earl for his question. These structured dialogues seem to work. Only yesterday, the one on citizenship met—I think for the 14th time—and made some important progress. I think there is a role for them, but also for using all the connections, structures and other meetings we have to try to push forward British interests. For instance, in my meeting with Commissioner Šefčovič, there is the whole issue of having an energy partnership. I think that is an excellent idea, but we have to get to grips quickly with electricity trading. It makes sense: we have these interconnectors, so let us trade the electricity and try to have lower prices here and lower prices there. That is an obvious example of win-win co-operation, but we should have a more structured dialogue at the same time, of course, and I will certainly read the report to which the noble Earl refers, which I have not yet seen.

Lord Dobbs: My Lords, I am delighted that my noble friend decided to come to this place—a decision that is probably much wiser than the one he made when he sent me here. May I ask him about relations with Greece? I declare my interest in the register as a member of the Parthenon Project, whose objective is to create a privately funded foundation to encourage exchanges of teachers, professors and students between our two countries, and also to share our priceless cultural objects and artefacts, which include the Elgin marbles—yes, it is not just the loony left. In our really crappy world, is it not right that we should reach out and use as much soft power as we can to reforge and strengthen our relations with our old friends?

Lord Cameron of Chipping Norton: I thank my noble friend for his question. I well remember sending him here, because a week later we lost a vote by one, and he was the responsible noble Lord. I remember  having some words with him after that—although, clearly, it had absolutely no effect. I do not agree with what he says about the Elgin marbles. The Government have a very clear position on that, which has been set out. I met the Greek Foreign Minister while I was at the NATO conference, and we had a great discussion about all the other aspects of our relationship, where we are strong friends, allies and partners.

Baroness Smith of Basildon: My Lords, when the Foreign Secretary spoke of the issues he was talking to the EU about, I think he left off one very important one—perhaps the most significant. That is the issue of international security. I take him back to those halcyon days of May 2016—he will recall them well—during the height of the EU referendum campaign. He was clear then that
“much closer security cooperation between our European nations”
is “essential”. Given his previous commitment, I was surprised that he did not mention it in the list of things at which he was looking at the moment. What will he do to renew and strengthen that security relationship between the EU and the UK? Is he willing to consider negotiating an EU-UK security pact that will complement our commitment to NATO?

Lord Cameron of Chipping Norton: Well, I had a feeling that some of my past words might be served up for me and I am sure that, as another former Prime Minister said, they will make a very fulfilling and satisfying diet as I eat them.
Yes, we did talk about security issues—specifically, we talked about security in the western Balkans—when I met Commissioner Šefčovič. Ukraine is perhaps one of the greatest elements of proof that the UK can make this relationship with the EU—of friend, neighbour and partner, rather than member—work. We co-ordinate with it very closely on how we support Ukraine, how we sanction Russians and all the rest of it. Of course, that is part of the relationship. Frankly, the other thing that has changed is that NATO has had an enormous boost from Putin’s actions. It is now bigger and stronger, with new members joining, and that is the ultimate guarantee of our security.

Lord Purvis of Tweed: My Lords, I am certain that the Foreign Secretary has some sympathy and understanding that the agreement has been a fairly harsh blow to the British Overseas Territories. I apologise that I missed his maiden speech in this House because I was in the Falkland Islands, where people told me that for their fishing industry, the largest part of the economy of the Falkland Islands, they are now spending more than £15 million a year to be Spanish-flagged vessels as a result of the lack of access to the EU market, which is their largest. I understand that the Foreign Secretary will be visiting the Falkland Islands, so will he take to them the good news that he will now negotiate an agreement that means that British fishermen on British vessels fishing in British waters will not have to do so under a Spanish flag?

Lord Cameron of Chipping Norton: I thank the noble Lord for his question. I can tell him that Minister Rutley from my department was in the Falklands  just a couple of days ago. I will certainly take the noble Lord’s point away. I am very committed to working with all our overseas territories. We had them all in the Foreign Office just a couple of weeks ago to discuss a whole range of issues, and I am happy to add that to the list.

Heritage Trees Bill [HL]
 - First Reading

A Bill to promote the protection and stewardship of heritage trees in England; and for connected purposes.

Baroness Young of Old Scone: My Lords, I declare my interest as chair of the Woodland Trust.
The Bill was introduced by Baroness Young of Old Scone, read a first time and ordered to be printed.

House of Lords (Hereditary Peers) (Abolition of By-Elections) Bill [HL]
 - First Reading

A Bill to amend the House of Lords Act 1999 so as to abolish the system of by-elections for hereditary peers.
The Bill was introduced by Lord Grocott, read a first time and ordered to be printed.

Digital Markets, Competition and Consumers Bill
 - Second Reading

Lord Offord of Garvel: Moved by Lord Offord of Garvel
Northern Ireland Legislative Consent sought.
That the Bill be now read a second time.

Lord Offord of Garvel: My Lords, I start my opening speech with a reference to the importance of digital. In recent decades, digital technologies have brought untold benefits to people around the world. From connecting us with loved ones in faraway places to streaming our favourite album or TV series in an instant, our lives are enriched by the services that these technologies enable. In the UK, digital technologies were fundamental to our collective response to the Covid-19 pandemic, helping businesses to continue operating and helping friends and family to stay in touch in challenging times for us all.
The digital revolution has also had transformative and hugely beneficial effects on our economy. The UK has the largest tech ecosystem in Europe. Last year, our start-ups and scale-ups raised more investment than France and Germany combined. We have more  tech unicorns than any other country in Europe with eight cities having at least two unicorns, including Edinburgh, Nottingham and Leeds.
The strengths of our vibrant digital sector are numerous and closely interlinked. From our world-class universities and breadth of tech talent to our support for start-ups and our innovative financing sector, the UK is a global tech powerhouse. Furthermore, the UK leads the world in our approach and response to developments in digital technology. Just last month at Bletchley Park, the UK hosted the first AI Safety Summit, bringing together Governments, leading technology organisations, academia and civil society to inform action at the frontier of AI development.
I turn to the rationale for the Bill and the detail of its parts. Part 1 is on digital markets. The continued success of our tech sector relies on highly competitive digital markets. Firms with alternative market offerings and innovative ideas should have the freedom to grow and challenge powerful incumbents on a level playing field. This benefits consumers by giving them access to the best products at the lowest prices.
However, the UK’s competition framework is not set up to keep pace with developments in fast-moving digital markets. A handful of powerful tech firms now dominate strategically critical services, such as online search, app stores and digital advertising, and in effect set the rules of the game for other businesses and consumers. Jurisdictions around the world are now considering how best to address the unique competition challenges presented by digital markets, and the UK is playing a major part in these efforts.
The Digital Competition Expert Panel and the Digital Markets Taskforce—expert groups set up to examine competition issues in digital markets—both independently concluded that digital markets have specific features which may lead them to tip in favour of one particular firm. This restricts choice for consumers, growth for emerging digital companies, and the potential of small businesses that rely on large firms to reach their customer base. As such, both groups recommended the establishment of a new pro-competition regime for digital markets, which the Bill delivers.
Noble Lords from across the House have also investigated these competition challenges and called for action. My noble friend Lady Stowell of Beeston and the Communications and Digital Committee conducted a review of the Bill earlier this year, for which I am very grateful. They consulted a broad range of stakeholders, including tech firms of all sizes. The committee recommended some further actions for the Government’s consideration, and I have no doubt that we will discuss these in detail during the passage of the Bill. I was, however, very pleased to hear its conclusions that the Bill’s objectives are “sound” and its measures “broadly proportionate”.
The noble Baroness, Lady Jones of Whitchurch, and the noble Lord, Lord Clement-Jones, also expressed their strong support for the Bill and provided suggestions for improvement, which I also look forward to discussing further. The advice of the noble Lord, Lord Tyrie, on legislative and institutional reforms to safeguard the interests of consumers and public confidence in markets, is also at the heart of the Bill’s measures.
The Bill is divided into six parts. Part 1 establishes a new pro-competition regime for digital markets, which will be overseen by the Digital Markets Unit. The Digital Markets Unit is an administrative unit within the Competition and Markets Authority. The Bill gives the CMA tough new powers to force the most powerful tech firms to treat businesses in the UK fairly, including through targeted action to address the root causes of competition issues, and to create opportunities for innovative start-ups in the UK to compete with these powerful firms. Greater competition in digital markets will lower the prices of everyday online goods and services, giving consumers more choice and control over the fundamental services they use online. This came across clearly during the Communications and Digital Committee’s evidence sessions. For example, the consumer advocacy organisation Which? noted that the Bill will benefit consumers through “more competition” and “more innovation” in digital markets.
Part 2 concerns competition. Competitive markets deliver a variety of good-value, high-quality products for their customers, because firms which fail to deliver will be overtaken by their competitors. They also enable innovative, dynamic companies to enter markets more easily, compete on level terms, and grow and gain market share. Measures in Part 2 of the Bill will refine the CMA’s competition tools, making investigations better targeted and its enforcement action faster and more effective. These changes will allow the free market to operate more efficiently. Market inquiries will become more efficient, flexible and proportionate, while the merger regime will be updated to focus on transactions with the greatest potential to weaken competition. The measures will also grant stronger powers to investigate illegal anti-competitive conduct.
Parts 3 and 4 deal with consumer enforcement and protection. Alongside effective competition, well-functioning markets require strong consumer protections. Such protections give people confidence to spend their money, safe in the knowledge that they have the right information to make sound purchasing decisions and have ways to seek redress if something goes wrong. Noble Lords on all sides will likely have had first-hand experience of the difficulties surrounding subscription contracts, including unexpected charges and unduly complex cancellation processes. Such subscription traps cost consumers £1.6 billion a year. A host of other unfair trading practices and consumer rip-offs also remain far too common, particularly online. Research commissioned by the Government has found that, for example, on the nine most frequently used platforms by UK consumers, up to 15% of reviews are fake, with consumers more likely to unknowingly rely on well-written fake reviews when purchasing products. Moreover, many Christmas and similar savings schemes are not protected in the event of business insolvency, so if a business enters insolvency, consumers face losing the money they had deposited.
At present, public consumer law enforcement lacks teeth: the UK is currently the only G7 country not to have any civil penalties for common consumer protection breaches such as mis-selling. Enforcers can apply for court orders to stop or prevent breaches and to obtain compensation for consumers. However, businesses may  still profit more than they lose from breaches of consumer law, because no financial penalties can currently be imposed for such wrongdoing.
The measures in Parts 3 and 4 beef up enforcement of consumer protections and address these consumer rip-offs. Part 3 creates a model that will allow the CMA to act faster against breaches of consumer protection, tackle more cases and protect consumers’ interests, while creating a level playing field for businesses. Part 4 includes a raft of measures to help consumers keep more of their hard-earned cash. New rights to subscription reminders and easier cancellations will help consumers exit the contracts they no longer want. This part of the Bill includes a power to add to the list of banned unfair commercial practices. This will ensure that the legislation keeps pace with changes in online consumer harms, which will give consumers greater confidence when spending and reward businesses which treat their customers fairly. Moreover, there are new protections for consumer payments to consumer saving schemes. These will ensure that financial failures such as the collapse of the Farepak Christmas savings club, which leave vulnerable consumers out of pocket, can never happen again.
Parts 5 and 6 contain cross-cutting and general provisions, including new information-gathering powers for the CMA to help boost competition in the road fuel market and protect consumers from unfair fuel prices. In addition, the Government recognise the importance of international co-operation for effective cross-border enforcement in a globalised economy. Measures in Part 5 will enhance the ability of UK regulators to co-operate internationally on competition and consumer matters, including introducing new powers to provide investigative assistance.
I come now to the Commons Report stage amendments. The Government engaged closely with parliamentarians and stakeholders throughout the Bill’s passage in the other place. Based on this engagement, a number of amendments were brought forward on Report in the House of Commons to strengthen the Bill. These amendments had two overarching aims. First, the amendments sought to strike the right balance between accountability over the CMA’s regulatory decisions and the flexibility needed for targeted and proportionate action to tackle the unique competition challenges in digital markets. Secondly, the amendments aimed to ensure that the Bill is strongly focused on consumers with the new and improved rights to deal with bad business practices, such as subscription traps, in ways that will not disproportionately burden businesses and potentially reduce consumer choice.
At a briefing I chaired last week with my noble friend Lord Camrose, I promised my noble friend Lady Stowell of Beeston that I would provide some assurances regarding the digital markets regime. First, I turn to consumer benefits. Amendments brought forward by Ministers in the other place reinforce the regime’s focus on consumers, by clarifying how the DMU will consider consumer benefits when imposing conduct requirements or taking enforcement action. Requiring the CMA to explain the consumer benefits that it expects to result at these points ensures that its decisions to impose conduct requirements are transparent and carefully considered. Clarifying the wording of the  countervailing benefits exemption will improve legal clarity, and I reassure my noble friend that it maintains the same high threshold. These changes make sure that consumers get the best outcomes possible.
Secondly, I turn to the appeals of penalty decisions. Appealing penalty decisions on the merits will allow firms to challenge the value of potentially significant fines, but will not allow firms to frustrate the regime or delay regulatory intervention. This brings the regime in line with the Enterprise Act 2002, and will provide reassurance to firms that the value of a fine imposed on them is appropriate. To be clear, all other decisions, including whether or not a breach of the regime occurred, remain appealable on judicial review principles. I hope this helps address my noble friend’s concerns.
The amendments agreed in the other place bring further clarity about the DMU’s approach to regulation. Together, they ensure that the DMU’s interventions are proportionate and drive the best possible outcomes for consumers.
In closing, this Bill will drive innovation, grow the economy, and deliver better outcomes for consumers throughout the UK. It is a hugely important piece of legislation and I thank noble Lords for their involvement in and support for the Bill so far. I look forward to hearing their views today and throughout the rest of the Bill’s passage. I beg to move.

Lord Bassam of Brighton: My Lords, it is a great pleasure to follow the Minister, who has very ably set out the purposes behind this much-needed and long-awaited Bill. I hope he has not given it a fake review or indulged in any drip pricing in his opening salvo.
Our Labour colleagues in the Commons made it clear during the passage of the Bill in another place that we are fully behind the intents of the Bill. Indeed, if anything, we wish to strengthen it—a comment that will no doubt be echoed many times during today’s debate. We are at one with its direction of travel, even if we have a slightly different destination. There are, for us, issues of continuing concern, and we will focus on these when we go through its detail in Committee and on Report.
I know the Government argue that the Bill delivers on a manifesto commitment, but the truth is that it has been much longer in the making. It was as far back as 2018 when the Government set up their Digital Competition Expert Panel, and it is nearly three years since the CMA set up the Digital Markets Unit. Even with a speedy passage through your Lordships’ House in 2024, this Bill will have little impact much before 2025—a full six years after the Furman report concluded that digital markets required a new approach. Of course, we were promised the Bill in 2022, the year of extreme chaos in government and a time when Ministers were not sure if they favoured any regulation at all. All the while, we have been falling further and further behind our European neighbours and other jurisdictions and playing catch-up.
Thankfully, wiser heads have now prevailed and we have a workable, if not fully formed, piece of legislation. We should be grateful to the CMA, UKHospitality, the Chartered Trading Standards Institute, the CAB,  Which? and others in the tech sector who have through their persistence helped make this happen. The sector and market are, as we know, dominated by a small number of large companies and the truth is that the lack of competition and regulation is acting as a barrier to market entry and expansion. This in turn impacts on consumers, their interests and the health of the market and our digital economy. Five years ago, the OECD reported that digital markets were exhibiting
“certain characteristics, such as low variable costs, high fixed costs and strong network effects, that result in high market shares for a small number of firms”,
so that:
“Firms in these concentrated markets may possess market power, the ability to unilaterally and profitably raise prices or reduce quality beyond a level that would prevail under competition”.
The ONS has reported that between 2008 and 2020 the percentage of adults reporting shopping online had risen from 53% to 87%. Those figures would have been given an extra twist since the impact of Covid. This trend will undoubtedly have led to greater exposure to the downsides of the digital economy, in particular the misuse of consumer data, misleading information and unrestrained marketing. We need, as our Labour colleague Seema Malhotra argued in the Commons, to deliver
“a pro-competition, pro-consumer, pro-growth Bill”.—[Official Report, Commons, 17/5/23; col. 886.]
For that reason, we need to recognise the harm that can come from the creation of monopolies in a digital economy and ensure that innovation is fostered. This will enable us all to share in the benefits of new and emerging technologies and use them to grow the economy and promote economic and social progress.
The challenge is to get the balance right in the framing of the legislation. On these Benches, we seek assurances that the Government will not resile from the current drafting of the Bill and the commitments made in another place. So, first, in terms of our asks today, I say no watering down of the Bill’s original intent. We will be seeking reassurance on that point and would like to hear that commitment on the record today. Secondly, while it is clear that the CMA and the DMU have the capability to deliver the Bill’s aims, we wonder whether they have the capacity. Can they, for example, communicate their policies, programmes and priorities effectively to stakeholders and legislators? Will they be sufficiently independent of the sponsoring department to be able to get on with the job? Furthermore, will they have the tools to undertake the necessary enforcement work to make the regulatory function effective?
On these Benches, we worry that, as with other regulators, they are hobbled from the start by a lack of the forensic investigatory skills necessary and trained personnel required. Can the Minister assure us that the CMA will have staff in place fully trained for the job and resourced to make it work? Perhaps he can outline the growth plan for staffing and put on record some details today demonstrating a workforce strategy. It is of little value to have a regulator with all the necessary powers if it cannot effectively exercise them—a quick look at the water industry makes that plain.
Earlier, I referenced our concerns about the potential dilution of the Bill. Two examples readily come to mind and I have no doubt other noble Lords will pick  up on them. First, the changes to the appeals test on the penalties regime will surely undermine the DMU’s primary purpose, which is to protect competition in the UK. Secondly, we are concerned that the addition of explicit proportionality obligations will create uncertainty in terms of the impact on the enforcement regime. Why have these changes been introduced so late in the legislative process and who asked for them?
Moving on from concerns about the weakening of the Bill’s measures, we want to make it clear that we have a long list of areas where we and, no doubt, other noble Lords want to see the Bill strengthened, so we give notice today that we will be tabling amendments to tackle the Bill’s most egregious omissions.
I am sure it will come as no surprise that we will be seeking amendments to the subscription contracts arrangement—moving from the opt-out principle to opt in—and seeking to tighten up the approach to fake reviews, drip-pricing and greenwashing. We cannot understand why the Government are reluctant to do more on product safety to ensure that fake products and counterfeits are fully covered. We also wonder why Ministers are so reluctant to use the Bill as a way of tackling the forever issue of ticket touts, digital fraud and the theft of creative content.
Tech platforms benefit enormously from the work of creatives, so why is it that platforms in particular are able to avoid properly and fairly paying them? Few of the rewards to the platforms themselves get passed on. That cannot be right or fair. It begs the question: should we be looking again at the law surrounding copyright in this context?
We will also want to revisit the countervailing benefit exemption issue. Currently, the exemption surely benefits the big tech companies with monopoly power more than it does consumers, even where some short-term benefit is claimed. By claiming an exemption, the platforms can easily evade conduct requirements and obligations. Perhaps the Minister can provide instances of anti-competitive behaviour where there are more benefits than harms; we have yet to find any of great significance. It might be the case that there is a need to develop a more rigorous test of the countervailing benefit claims made, and a measure of consultation with the public to ensure their validity. In this light, we will want to discuss the need for an interests of citizens duty to be inserted into the Bill to strengthen the hand of consumers.
Finally, there are issues that relate to how the CMA operates. Is there not a case for more to be made of the CMA’s co-ordinating role as an enforcer? It is not the only body that will exercise the powers contained in the Bill, but it is the lead regulatory agency. Could more be done to recognise that, so that best use is made of the enforcement regime and regulatory leadership is entrenched?
This is a large Bill, almost too big to summarise and with many issues hidden and tucked away within it. We will listen carefully to the debate today, particularly on subjects such as final-offer arbitration, the alternative disputes resolution scheme, the potential vulnerabilities of the “strategic market status” designation, and the need for a takedown power for trading standards officers to enable them to provide for swifter remedies where there is self-evident harm to consumers and a need to act.
This Bill is much needed and has been for much of the lifetime of this Government. As I said at the outset, we support its direction of travel, but that does not mean that it is not capable of improvement through challenge, or that we will give it an easy passage.

Lord Fox: My Lords, it is a great pleasure to be working on this Bill—a Bill that we on these Benches broadly welcome. I hope we will be able to work constructively to improve it as it moves through your Lordships’ House. It is about time, as the noble Lord, Lord Bassam, noted. The Furman report was set up five or six years ago; we have been impatient for competition law in the digital space to be reformed and for the Digital Markets Unit to be empowered—so, at last.
As the noble Lord, Lord Bassam, also noted, this is a big Bill, and it acts in a number of different ways. I fear that many of the things I say will be similar to what was said by the noble Lord; in order to maintain novelty, I will probably say them in a different order.
I will start with consumer issues. Clearly, these issues have excited correspondence from a lot of people in the outside world. We should note and thank them for the work that they have done in sending through a load of briefings. There are some important issues here, and areas that should be tightened up and improved. These include: tackling online scams, dealing with product safety issues and strengthening trading standards; taking action on primary and secondary ticketing; impeding price drip and mid-contract price rises; addressing the pernicious nature of fake reviews, as we heard from the Minister; devising a sensible way of redesigning automatic subscription rollover—there is a danger of us taking a number of other areas down with the law we have, so we must be careful of unintended consequences of that move—and delivering a range of other consumer rights, such as the possibility of collective action for consumer claims. I am sure there will be plenty of grist to this mill as we work through that part of the Bill.
Moving on from consumers, the second big challenge is the need to tip the balance of power toward content providers—and here I should declare that I have several creators in my family. As a basic principle, all content creators should be properly paid for the work they do. UK law requires payment for the commercial use of another’s copyrighted work, yet commercial use is currently being made of content by global platforms without any permission being obtained or payment being made. The dominant platforms profit from the efforts of content creators, from songwriters and artists to publishers and broadcasters, and they do not get rewarded.
The News Media Association estimates that over 50% of searches are news-related, but Google keeps the value of repeated visits and the value of online footfall that is generated. As such, copyright law looks foolish, as the system is being gamed. Smaller players must try to sue their distributors to enforce their rights, but they cannot risk such a move or indeed afford to take them on. Indeed, the evidence suggests that it is difficult even for Governments to challenge these platforms. After almighty tussles, the Australian  and Canadian Governments have won concessions. It remains to be fully appreciated how those will pan out but, as well as highlighting the global dominance of the big two, those fights highlighted an essential difference between Meta and Google when it comes to news content, which is of great interest.
The Bill must make it clear that platforms need to pay properly and fairly, on benchmarked terms and with reference to value for end users. Additional clarification is needed on how a final offer mechanism would work in practice, and we will be seeking that, but really a bigger change is needed. That change should require those using and distributing content to obtain the owners’ permission before they use it, and we will be pushing for that.
I remind noble Lords that that we are discussing the Digital Markets, Competition and Consumer Bill—so competition is a central part of it and we have already heard elements of that. But, in the market that we are looking at, competition is weak—if not frail, to perhaps overstate it. In our view, the pro-competition interventions are one of the Bill’s most powerful features and a big step forward. We must use the Bill process to ensure that the powers are sufficient and Ministers must articulate government support for the ambition that the CMA and its DMU will need in order to start to take on the competition challenge, because that will require a big shift in emphasis from the CMA.
At present the CMA deals with a lot of mergers— 50 to 70 detailed investigations a year—while enforcement typically attracts fewer than 10 cases per annum and there are hundreds of complaints for it to deal with. When looking at competition matters, including acquisitions and mergers, the world’s competition authorities have focused on efficiency and short-term consumer benefit, but, as we have been reminded recently by the Court of Appeal when it found against Apple, the overriding objective of the CMA, as set out in the 2013 Act, is to promote competition in the interests of consumers.
“Promoting competition” does not mean just assessing the efficiency of a monopolist; in digital markets, this approach has delivered global oligopoly. So, while Web 1.0 was an open access—albeit read-only—platform, Web 2.0 has been captured, intermediated and monetised by a very small number of profitable concerns. That has been achieved largely through acquisitions that have been waved through by the authorities. Looking at the publicly disclosed acquisitions between 2008 and 2018, we see that Google has acquired 168 companies, Facebook 71 and Amazon 60. Now, thanks to this and other things, they control the core software in web browsers and device operating systems, and through that control they determine what we see, what we find, what we search on the web and how we pay for stuff.
The Bill is, in many respects, seeking to close the gaping doors of empty stables that this approach has delivered and, to do so, short-term consumer welfare cannot be the sole—or sometimes even the primary—consideration. Promoting competition means taking into account market structure and the ability of players to innovate. When looking at mergers, regard has to be taken of the effect of allowing large companies to buy innovative ones so that they can assimilate or retire  their ideas and technology. In that context, we very much welcome the CMA’s approach to the Microsoft acquisition of Activision Blizzard and Ofcom’s decision to refer the hyperscalers in cloud services for an investigation by the CMA. This demonstrates that the CMA is up for a global challenge in this strategic way and that it can play a leadership role.
Looking forward, as well as mitigating the competitive and consumer issues thrown up by the centralised Web 2.0, the Bill should empower the CMA to help usher in a genuinely decentralised Web 3.0. As Professor Furman reminded us in evidence in Committee in the Commons, intervention interoperability is a vital remedy—and we say that interfering with interoperability in all its forms should be policed by the DMU. That means embarking on investigations and actions with the aim of distributing the power and control over Web 3.0, creating a network that spans a large base of independent actors. This speaks to the technology on which the network is based and the standards that are set to deliver that network.
It seems clear that the DMU should be proactive with respect to promoting international standards and aiming to create that interoperability: for a start, by focusing on open access and operational transparency, working for standards that allow unrestricted participation and favouring the technologies and protocols that prevent a single person or group amending or reversing transactions executed and recorded. It would be good to hear from the Minister, when he sums up, on the role that the Government feel the DMU and the CMA should be playing on the standards authorities—the IETF and the W3C. How do we see engaging further and more thoroughly with those standards bodies, because that is where the first fight starts in these technology issues?
So there is a lot resting on this Bill. The architecture of the web is currently threatened by those who would create and preserve their own walled gardens of content that is provided by others, privatise a public resource for their own ends and monopolise all content offered to the public via the internet for their own profit. This is not an abstract need; additional danger is already with us. Big tech is busy wrapping its tentacles around AI, including by co-opting start-ups for investments and partnerships. It is critical that the CMA uses these new powers to keep that technology open before it, too, is intermediated.
To deliver on this, however, there are many issues to be addressed. Your Lordships will no doubt come up with many others; we have already heard a list from the noble Lord, Lord Bassam, who will be pleased to know that there are many coincident issues. I will give a short list before I end of the issues that we will be keeping an eye on: ensuring that the Bill no longer gifts to strategic market status players the opportunity to challenge DMU decisions on the basis of lack of evidence, which means looking at the five-year view that is required; securing the role of judicial review and making sure it is not eroded; strengthening the leveraging principle that denies third-party developers revenue; understanding the Government’s position on data and information-sharing; clarifying how the final-offer mechanism would work in practice; probing the proportionality tests brought in via the latest amendments;  challenging the changes to the definition of “counter- vailing benefit”, which also came through the amendments; enabling those with content to be paid properly; and allowing smaller businesses a voice and an ability to bring claims and, where possible, be awarded exemplary damages.
This Bill is a weighty tome, but it has a vital role in shaping the architecture and landscape in which the future digital economy will be built. It will help establish how the value of this economy is created and distributed. It will influence how easy or hard it is for challengers and disrupters to enter the market. Our job, therefore, will be to ensure that the CMA and DMU have the powers they need, but, more than that, our job is to articulate the cross-party ambition we have for this direction of travel and to launch the DMU with our overwhelming support to maximise its success.

Baroness Hayman: My Lords, I declare my interests as chair of Peers for the Planet and a director of the associated company.
The content of this Bill is not my area of expertise— I intend to contribute on a very narrow issue—and I was therefore particularly grateful for the clarity with which the Minister described the content of the Bill and for the parsing of its contents by the two Front-Bench speakers. I thought I would be making a speech perhaps at the end of a long list of speakers, when everything had been dealt with and raised, as a little coda, but I find myself speaking first from the Back Benches.
However, I can at least assure the noble Lord, Lord Fox, that I have something to add to the list of things we might need to deal with in this Bill. It is a narrow issue, to which I will speak in a moment, but I would like to raise one other thing. In the briefings that I have received since putting my name down on the list, important points were raised by a number of charities on the measures proposed around the auto-renewal of subscription contracts and the impacts they may have on the claiming of gift aid. That is an issue I hope the Minister responding to the debate might speak about.
I will focus my contribution on Part 4 of the Bill, which relates to the protection of consumer rights, and what I believe is a missed opportunity in relation to right-to-repair provisions. I am grateful for the work of organisations which have briefed on this issue, particularly the Design Council, which has a long-standing interest in this area. Strengthening our existing right-to-repair provisions and extending them in line with international norms would have multiple benefits. It would help us to shift to a more circular economy, reduce the waste from our throwaway culture and drive down emissions.
I am sure that there is no one in the Chamber who has not had some experience of planned obsolescence—where manufacturers have deliberately designed a product to limit its lifespan. For example, they have had to throw away a perfectly good kettle and buy a new one because the on/off switch has stopped working and it is not possible to replace that part, or they have had no choice but to buy a new mobile phone because the producer has stopped providing software updates even though the handset continues to work perfectly.
The apparent growth in terms of increased demand that comes with planned obsolescence is not sustainable growth. It does not add to people’s quality of life. In fact, it impoverishes consumers and wastes resources, depleting us of the critical minerals we will rely on and need more of in the future. It also creates huge problems of waste disposal.
Globally and nationally, we need to do more to protect both consumers and natural resources by extending product lifecycles. The most recent research from the UN-sponsored but industry-compiled Global E-waste Monitor showed that the UK produces 1.6 million tonnes of electronic and electrical waste each year. This is the second highest per capita amount of waste globally. The UK really needs to do better in terms of expanding our right to repair.
The measures that we have introduced to date have been very limited, focusing on manufacturers of certain larger electrical appliances being required to take very limited steps to make repairing the items easier for consumers. While the UK languishes at the bottom end of the league tables in respect of the quantities of electronic waste that we generate, other countries are racing ahead. The European Parliament just last month voted overwhelmingly in support of the consumer’s right to repair, which proposes banning built-in obsolescence. Three US states are now passing similar legislation.
The Government are aware of the problem. They said in their cross-departmental plan, Maximising Resources, Minimising Waste, that they are considering broadening the existing right to repair requirements under the 2010 ecodesign regulations and Schedule 7 to the Environment Act, to include a wider range of electrical products. Given that the Bill provides the ideal opportunity to do this and, at the same time, strengthen the existing provision to make them work better for consumers, why are there no provisions in the Bill on this area? There is widespread public support for what is proposed. A recent poll, carried out by YouGov, found that 85% of the public support expanding the UK’s right to repair regulations to cover all consumer groups.
I hope very much that the Minister might be able to meet and discuss before Committee how a right to repair could be best integrated into the legislation before us. It is an opportunity for the Government to follow through on their commitment to protect consumers and match or exceed the ambition shown elsewhere in the world. By doing so, they would kickstart a shift to a more circular economy, reduce waste and protect consumers from costly and unnecessary expenditure.

Lord Vaizey of Didcot: My Lords, I am grateful for the opportunity to speak so early in this debate, ahead of many noble Lords who actually know what they are talking about and have specific expertise in this area. I begin by declaring my interests in the register, specifically my role as a trustee of Tate, adviser to Pixel United and broadcaster on Times Radio, which is owned by News UK.
I should say from the outset that I am a huge supporter of this Bill. As the Minister set out at the Dispatch Box, updating our competition regime—for the first time comprehensively, I think, for some 25 years  —is long overdue, to take account of how the digital tech giants have changed the landscape. It is one of a number of pieces of legislation that this Government are putting through, including the Online Safety Act, the forthcoming media Bill and the data protection Bill, providing a much-needed framework for regulation of digital companies.
I shall concentrate on two issues in the Bill, but I have to say that I was extremely grateful to all the Front Benches for highlighting some of the other issues, which I was blissfully unaware of, particularly aspects such as copyright—so I may well get stuck into some other issues in Committee. But we all know what we are talking about, when we talk about giving the competition authority power: we are talking about the power to take on big tech and big platforms such as Apple and Google, which have effectively established a duopoly. They set the terms and conditions and the rents, and there is very little comeback.
It is an unusual position to be in, because as consumers we all benefit from this technology. During my speech, as it becomes duller and duller, noble Lords will whip out their iPhones and androids and have a range of apps to choose from. But this is really a Bill which puts small businesses in the place of the consumer, because small businesses are being shut out from these opportunities —and who knows what other apps noble Lords could have taken advantage of if this Bill was already law.
One key issue for me is the appeals standard, because it is vital that the regulator has the opportunity to take on big tech, reach judgments and levy fines. I know from my time as the Telecoms Minister, working closely with Ofcom, that an appeal on the merits was a gift to the big companies and a burden on the regulator. It wildly extended the time in which a proper conclusion could be reached, it cost huge amounts of money and the firepower that could be deployed against the regulator, in terms of the quantity of lever-arch files, was something to behold. So, it is quite right that we have judicial review as the appeals standard in the Bill—which I think only adds to everybody’s confusion as to why the Government appear to have muddied the waters.
The great opportunity, obviously, of a Second Reading debate is to raise these issues, to explore them in Committee and to give the Government ample time to explain why these changes have been made and why they think they are the right ones, because I obviously approach it with an open mind. For example, if there is going to be a merits appeal on fines resulting from an adjudication, that may work provided it is clearly limited, effectively, to the quantum of the fine and no more. Nevertheless, I would still like to know why this slightly confusing change has been made from a simple JR standard throughout the process. Then—and it has already been raised by both opposition Front Benches—there is the idea of proportionality in the JR appeal standard and imposing conduct requirements. Some people say that this, in effect, creates a new appeals standard of JR-plus: again, this is very confusing. It would be much better to keep it simple and straightforward, because, goodness knows, those big companies have enough resources to tie the regulator up in knots without the Government, perhaps unintentionally, giving them a helping hand.
There are numerous other, smaller points within this framework of how the investigative process works which are important to highlight. They have been highlighted, as I am sure noble Lords are aware, by a number of organisations and campaign groups that wish to bring them to our attention. These include the consultation rights for challenger tech firms to be involved from the very beginning of a CMA process to avoid the circumvention of any solutions by strengthening the leveraging principle, so that, in effect, big tech cannot extract rents by using a different method. We have already heard, as well, about the countervailing benefits exemption—the ability for companies to argue that they are benefiting the consumer; and the removal of the word “indispensable”, which I understand is a clear legal term and therefore has a slew of case law on which the regulator could rely, again causes more confusion. My overwhelming message to the Government is that they have got it absolutely right in applying the JR principle; why are they therefore setting these slightly confusing mini changes throughout the process, because they do not really add up?
I also want to talk about a separate issue. I am sure, looking around the Chamber at some of those who are due to speak, that subscriptions will come up. I hugely support the idea that it should be as easy as possible, in a digital age, to cancel a subscription. I remember well once taking out a subscription to an online publication because I wanted to read a particular article and then, when I wanted to cancel the subscription, there was literally no way of doing it—it was a US magazine. Luckily, I knew the chief executive, so I found myself ringing him and begging him to allow me to cancel it: that cannot be the right way.
We all know, with our iPhones, that it is only recently that they have changed the way we can cancel subscriptions on an iPhone. It is, I am afraid, a truism that many companies that offer subscription products have an incredible imagination when it comes to making it as difficult as possible to navigate your way out. Most people should be confident enough about their product to know that they will keep their consumers if they continue to provide a fantastic product, and they will lose them if they do not.
Let me, however, completely contradict myself by asking the Minister—he knows what is coming—to exempt charities from the rules that are coming in the Bill. The Bill treats charitable membership, as I am sure he is aware, as a commercial transaction rather than a donation. That means that memberships or subscriptions would have to be refundable, and it means that charities cannot claim gift aid on the subscription, because gift aid applies only to donations which cannot be refunded.
Numerous charities have contacted me and, I am sure, other noble Lords, including very well-known ones such as the National Trust, the Zoological Society of London and the Royal Horticultural Society—you cannot say no to the Royal Horticultural Society—and Tate finds itself in the same basket. The changes would put pressure on Tate’s budget—I will not read out the cost it has estimated—and therefore could force the Government to look at their grant in aid for not just Tate but many other museums. It would have  deep implications for Tate’s ability to fulfil its public service. As well as the financial costs, there would be huge additional bureaucratic burdens.
As I am sure we are all aware, charities are calling for charitable membership organisations to be included in the list of exemptions. For example, Tate is already regulated by DCMS and there are exemptions in the Bill for suppliers of services regulated by Ofcom. In the other place, the Minister introduced an amendment excluding the lottery as having charitable ends and already being regulated elsewhere. Surely, something similar should apply to other charities too. Have the impacts on charitable memberships been considered, in particular the pressures on national museums and their grant in aid allocations? If an exemption is applicable to the lottery as being already regulated and having charitable good, why does it not apply to museums and other charitable membership organisations?

Viscount Colville of Culross: My Lords, I declare an interest as a television producer. I too welcome this Bill, which has been a long time coming.
Five and a half years ago, I had the honour to be a member of the Communications and Digital Committee inquiry into digital advertising in the UK. We heard how the two big tech companies, Facebook and Google, used the combination of their massive databases and near-total control of the supply, intermediary and purchase sides of the digital advertising market to take a more than 80% share. Our inquiry recommended that the CMA conduct a market study as quickly as possible into the digital ad market. Two years later, that market study confirmed the tech companies’ near-complete domination of the market. It concluded that the lack of competition harmed consumers by excessive exploitation of their data and lower quality of service to them and to advertisers.
However, the tech companies’ dominant position in the market has also had a deleterious effect on media advertisers. Publishers of news in particular have suffered from the massive reduction in advertising revenue. In the first half of 2020, while tech platforms’ ad revenue grew, digital advertising fell by 8% for national news brands, by 10.5% for online magazines and by 10% for online regional titles. It is expensive to create original news and, especially, to launch investigative journalism, which is essential to holding those in power to account.
It was therefore not surprising that the Communications and Digital Committee launched an inquiry into the future of journalism in the digital age. Journalism deserves special consideration in this Bill. I say this not just because I am a career journalist but because it plays a role of public value and importance to our society and democracy. It helps people stay informed about the world beyond their personal experience—surely a prerequisite for an active citizen in a democratic society—but it is under threat, especially the provision of local news.
In the digital age, people’s consumption of news has moved dramatically online. Ofcom’s 2021 report showed that 45% of UK adults got their news through social media sites. The number must be much greater now. Much of this is posted by users and viewed on platforms without reference or redirection to the  publishers’ websites. The tech companies have their own curated news sites, such as Google’s news showcase and Facebook news, which aggregate news from a wide variety of sites. An article from an extreme magazine can sit alongside FT journalism and the reader be none the wiser. All this is damaging for the brands of the legacy media. Most news publishers have moved online, but the combination of falling advertising revenue and the tech companies’ free use of their news—at best giving minimal remuneration for their provision of it—has led to considerable cost-cutting and redundancy.
There are a few glowing exceptions in America. When Mark Thompson was CEO of the New York Times he invested massively in journalism, and the company is managing to make a profit from digital subscriptions. But to compound the exploitation of media companies, artificial intelligence is also using journalistic content as a free database for training its large language models. An academic paper published recently found that the greatest source of data for OpenAI’s LLMs came from the New York Times. The BBC ranked second, with its content providing 1.6% of the total database, and the Guardian closely followed with 1.5%. This content is so valuable for AI training because the data is of high value and original. Most importantly, it is taken from the publishers by the AI firms for free.
It is not surprising that the exploitation of the media publishers by the tech companies is having a devastating effect. In the last 17 years, more than 271 print titles have gone out of business, and goodness knows how many have become freesheets, sacked their journalists, withdrawn from covering local councils and courts, and mainly publish press releases. Reach plc, one of the biggest publishers of local news, recently announced 450 redundancies, including 320 editorial roles. That was its third round of cuts in 2023 alone, bringing the total number of jobs at risk to more than 1,000. The trend is accelerating.
The power imbalance between tech companies and publishers means that the former are not prepared to move much to reduce their dominance of the digital ad market, provide proportionate remuneration for the use of journalistic content or give publishers more control over how their content is used and provenanced. So I greatly welcome the final offer mechanism and the conduct requirement process set up in the Bill. The threat of the final arbitration by the regulator of two offers of remuneration is obviously a backstop, and I know that His Majesty’s Government hope that the CMA will never have to be in a position where it can make this decision.
However, my concern, and that of many people in the media, is that this beautifully thought out and carefully crafted CR process, which gives plenty of opportunity for the designated SMS companies to abide by a code of conduct, could take a year and a half to complete, if not longer, whereas in Australia it takes six months to come to arbitration. Meanwhile, many small publishers, which are already on the edge financially, will not be able to wait that long.
My fear is that the tech companies have so much to gain from the present situation that they will act in bad faith. In Canada, the Government estimated that the value of news content to Google was 300 million Canadian dollars. However, after exhaustive negotiations  it ended up paying just 76 million Canadian dollars. I too ask the Minister to consider whether Clause 38(3), when the SMS company has breached an enforcement order, could be a more effective point in the process at which to pressurise the two sides to agree fair terms.
Like the noble Lords on the Front Bench, I am worried about the introduction of the Clause 29 countervailing benefits, which were inserted at the last minute before the Bill went to the other place. I imagine it was done at the instigation of tech company lobbyists, who will use it to delay the CR process yet further. In the other place, the well-established definition of “indispensable benefit”, set out in the Competition Act 1998 and tested through the courts, has been thrown out. The Bill now has a new definition of benefit. Thresholds are set out in the clause, but the courts will still have to decide what “benefit” now means. Can the Minister explain how that will clarify and speed up the effectiveness of this Bill? The Bill is supposed to be dealing with anti-competitive practices set up by the SMS company, but surely Clause 29 creates an opportunity to give extra lobbying power to companies that already have the most effective and well-paid lobbyists in the world.
I am also worried by Clause 114, on the control that the Secretary of State has over guidance to the CMA in setting up the machinery of the CR process, and then also having power over guidance on setting up an individual SMS process. The noble Baroness, Lady Stowell, fought hard, and with some success, during the passage of the Online Safety Act to try to limit Ministers’ control over Ofcom’s work. Political independence must be the mainstay of a successful regulator. However, this clause as drafted gives the Government endless time and power to send guidance back to the regulator for revision. I am convinced that this will cause unnecessary delays and politicisation of the CR process. At the least, I would like to see a time limit introduced for the Minister to accept CMA guidance proposals.
I am also concerned about powers given to tech companies further down in the Bill, in Part 4. Clause 259 sets out the duties of a trader on the cancellation of a contract, and they focus on providing various types of notices and dealing with potential overpayments by the consumer. Although the retrieval of personal data is covered under the GDPR, there is no provision for the retrieval of non-personal data, which might have been provided to the trader during the subscription period. This could be data about household fuel consumption, cloud-based Word documents, comments on social media or videos uploaded to video-sharing platforms.
The consumer might want the legal right to retrieve their data from the service before the subscription ends. More importantly, the trader might want to keep non-personal data and make it available to other users without the consent of the consumer. In my view, this is an omission that many people would be pleased to have rectified by an amendment to the Bill.
I too share the frustration of the noble Lord, Lord Vaizey, about the difficulty of ending subscriptions. An even more popular option to the Bill would be the introduction of an end-of-contract button labelled “terminate now” on the front page of digital services websites. Often it is hard to find the unsubscribe  button on a website. On occasions it has taken me some time to burrow down through the layers of a site to find the unsubscribe button hidden away in a digital corner. German law provides for a compulsory button, which allows the consumer to enter all the essential information needed to end the contract—that would be a benefit to the customer.
This is a huge and complex Bill, and it has been a long time in its gestation. I am very pleased to see our country finally confronting the anti-competitive behaviour of the big digital players and protecting consumers for the long term.

Lord Tyrie: I declare my interest as an adviser to DLA Piper. I too strongly support the Bill. Rather than dwell in any detail on how to improve it further—there will be plenty of time to do that in Committee—I thought it might be helpful first to attempt briefly to explain what I think is the Bill’s place in a wider policy perspective, and why I support it. Secondly, I will explain why the legislation on its own probably will not deliver the benefits that we are hoping for it. The CMA needs to do better, and so will Parliament, in scrutinising it.
On the first point, it is now widely accepted in many western democracies that competition policy has simply not been delivering the goods. I will not dwell on this for long, but concentration ratios are rising everywhere, and consumer detriment with them. The result is an erosion of public confidence in competition and consumer protection and in many regulatory bodies, including the CMA. That is only part of a much bigger picture of vulnerability to obsolescence of the tools and machinery that western Governments have been using over the past 30 years to manage capitalism and secure consent for it.
One of the problems the Bill seeks to address is that the West’s technological inventiveness, while improving economic performance, has also had the effect of challenging the legitimacy of global free enterprise. The platforms were created by global capitalism and they have improved consumer welfare dramatically. But they have also brought corrosive by-products: risks to privacy, fake news, online harm, greater cyber risk. These corrosive effects have been greatly amplified by the tendency of big platforms to monopoly. Western Governments are now struggling to adapt the machinery of regulation—in some cases radically—to cope with this. Consumer protection has also been badly neglected. Millions of people now feel vulnerable to rip-offs and no longer think that free enterprise works for them. As the noble Lord, Lord Vaizey, pointed out, small businesses —which are also consumers—have been at the wrong end of platform power a great deal recently.
Unless we face up to it, the free enterprise, pro-competition settlement, which has brought so many welfare benefits in recent decades, will be put at risk. Like us, all the democracies are groping their way towards addressing these challenges, to which the noble Lord, Lord Fox, also alluded. The Bill is at least a start but, none the less, the improvements to competition and consumer protection policy proposed will make only a small contribution to the much broader intellectual challenge I am trying to set out.
The Bill is at least intended as a reboot of the CMA’s legislative base. It largely provides it, and it has the potential to improve Britain’s economic performance a great deal.
Of course, it is scarcely surprising that I support the Bill. Much of it draws on the detailed proposals that I put to the Secretary of State nearly five years ago in response to his instructions that, as incoming chairman of the CMA—and I am more or less quoting—I try to shake the CMA up, raise its profile, and advise him on what, if any, improvements to the statutory base might be needed. I was told to get on with it and come back to him in six months, which I duly did.
What did I find? In a nutshell, I found highly motivated and high-quality staff—among the very best in public service. I found good, sometimes outstanding, work being done in two of the CMA’s five major areas of statutory responsibility—mergers and anti-trust—but, in varying degrees, a neglect of the other three: markets, advocacy and consumer protection. Internally, they had become the CMA’s poor relations. I also found a lack of boldness at the top and some substandard governance. Frankly, this is no more than we have seen in recent years in many other regulators.
I reported this to the then Secretary of State, but I told him that we needed to get on with the legislative improvements anyway, particularly on consumer protection and digital. I also said that we would need other improvements for it to be effective: a change in mindset at the top, and a much higher profile taken on behalf of the consumer by the CMA, with much better communication to a wider public. I also said that work was needed to develop a deeper understanding of the state of competition in the UK economy as a whole, and that this needed to be used to target the CMA’s workstreams. Virtually none of this work was being undertaken when I arrived at the CMA.
As far as I can tell, the three problems that I outlined still persist to varying degrees, so it is not just the legislation but, to some degree, the CMA’s approach to implementing its statutory remit that needs a reboot. If we do not secure that, the CMA will not deliver what we expect of it and hope for it. Even more concerningly, the growing sentiment of many of the public that they are victims of a rip-off economy, run for the benefit of the few and certainly not for them, will develop further. That is why the later parts of the Bill, particularly those improving consumer protection, are at least as important, although perhaps less glamorous to talk about, as the digital measures in Part 1.
My impression is that the new chairman and the new CEO are on the case. They both recognise the need for an organisational reboot. They will need our support in that. In any case, these problems are not entirely a matter for them. The CMA has only been responding to the signals that Parliament and others have put before it. Faced with those signals, many of us would have done the same. Parliament needs to send much better signals. In particular, we need to develop scrutiny tools that can get deep into what really goes on in the CMA. It needs to be rewarded with praise and support for improvements in its strategic approach when they come. There have been quite a few recently; I will not list them, for the sake of  brevity. Of course Parliament should also flag up the CMA’s shortcomings, but it should always do so on the basis of detailed evidence.
To do that, Parliament will need to develop much more technical expertise than is currently available to it. It needs a specialist group—probably answerable to a dedicated Select Committee and with some of the characteristics of the NAO, but much smaller—that can get into the detail of the CMA’s working methods. By doing so, Parliament can help to shape the CMA’s decision-making framework and its wider public engagement, to which I alluded, just as the Treasury Committee has shaped that of the Bank of England and the FCA over the past decade.
One of the reasons that the Bank of England engages in public discourse and explanation of its role is that Parliament makes sure that it does, but that is currently not the case with the CMA. I asked to appear before the BEIS Select Committee when I was chairman and discovered that, when I appeared, it was the first time that any CMA chairman had ever appeared before it. They had simply evaded, avoided or had somehow been the subject of neglect by the BEIS Committee for many years. Of course the committee is extremely busy and has far too much to do, hence my suggestion for a specialist body. I said earlier that not only Parliament but the Government should act as an enabler of better scrutiny, and I have quite a number of suggestions for the Government but, rather than raise them now, I will try to press them in Committee.
I end with just one further remark. I have tried to put the legislation in a wider policy perspective, and I have lingered on the need for an institutional reboot of the CMA and the responsibility that we carry in Parliament and the Government to secure that reboot. But the CMA is becoming a repository for a good number of the Government’s smelly rats. It has been asked to monitor the internal market and has acquired responsibility for the highly politically sensitive topic of state aid, now travelling under the new name of the Subsidy Advice Unit. That is all before this huge Bill and the new big-ticket mergers that are coming its way post Brexit, which have recently been so controversial. With this Bill, we are going to empower the CMA with huge new responsibilities even as it struggles to do a full job with its existing powers. Government offload is risking CMA overload.
Twenty-five years ago, we overloaded a new body, the Financial Services Authority, with new responsibilities. Offload from the Bank of England and from other institutions became overload at the FSA. It failed spectacularly a decade later. When it failed, it was carved up. We need to put in place the support and scrutiny here for the CMA to accompany this Bill that can give the CMA better protection against such an outcome in the years ahead.

Baroness Stowell of Beeston: My Lords, it is a pleasure to follow the noble Lord, Lord Tyrie, and I will come to his theme of accountability later in my remarks, but I am very grateful to my noble friend the Minister for setting out in his introductory speech just how successful the UK’s tech sector is to date, because  it really is a huge success. I was delighted to learn that Nottingham, my home city, is one of only a small number with two unicorns—billion-dollar tech start-ups. I did not know that, so that was good to hear.
Although we have been successful so far in the tech sector in this country, we have the talent and the potential to do so much more. But we have a problem, as we have already heard, which is that our digital markets are not working properly. The financial clout and sheer computing power of the US tech giants are creating significant, often insurmountable barriers to entry for alternative providers. I want to be clear that the Bill should not be about bashing big tech. We should not penalise these businesses because of their size. Their success and innovation also create other business opportunities, providing products and services that millions of people use and love. But that does not mean they should control the way markets develop and who else gets the chance to succeed. Like most, if not all, of my noble friends on the Conservative Benches and my erstwhile noble friend Lord Tyrie, I believe that free markets drive growth when they allow for effective competition. When markets are not creating that competitive landscape on their own, Governments should step in—hence the Bill before us.
Noble Lords have already heard that the Communications and Digital Select Committee, which I am privileged to chair, has started to call for legislation to empower the CMA with a new ex ante regime under the chairmanship of my predecessor and noble friend Lord Gilbert of Panteg. Through several committee inquiries, we have heard evidence of many things— we have heard about some of them today—including: unfair dominance and control of the immensely powerful and increasingly important digital advertising market; non-negotiable fees and terms applied by Apple and Google on thousands of businesses that rely on app stores, even though the terms of trade prevent some of those businesses providing a more streamlined experience and cheaper prices for their customers; and big players using their dominance in one part of the digital market, such as search, to damage the prospects of a potential competitor in another, such as online shopping or travel bookings. In our committee, we also continue to learn more about the failing of our digital markets as more firms, previously reluctant, are now willing to speak publicly about their experiences. So, as much as I would rather that the Bill was not necessary, the case for it is clear.
Once the Bill had been published and introduced to the Commons in the summer, my committee held hearings on Parts 1 and 2. I shall speak on only those parts today, but I have been interested to hear noble Lords cover other issues, to which we will no doubt return in Committee. I am grateful for all the briefings that I have received on all parts of the Bill.
I come back to the focus of my remarks. Overall, we as a committee found the Bill’s objectives and principles to be sound and a good basis for regulation. In our subsequent formal letter to the Secretary of State, we highlighted three important measures that we considered proportionate. My noble friend the Minister acknowledged that that is what we said, but he has not acknowledged something else we said: that  these measures should not be diluted during the passage of the Bill. The three measures that we highlighted were the appeals process, the countervailing benefits exemption and the leveraging principle.
We knew from our evidence sessions that the big tech firms would lobby hard for changes in these areas. When all is said and done, they are successful businesses that will understandably fight hard to retain their positions. So, in the face of considerable pressure from them over the past few months, there was some relief when the government amendments tabled on Report in the Commons were less extensive than many had feared—but they are changes none the less.
Not only would any further dilution to these measures be unacceptable; the government amendments that have been made deserve proper scrutiny and debate to resolve the uncertainty that they have created. What I mean by that is that, in two or three years’ time, when the Competition Appeal Tribunal is considering an appeal, we need to be sure that judges will be in no doubt as to what the Government and Parliament intended by this legislation. We must avoid delays and outcomes that undermine the purpose of this Bill.
In his opening remarks, my noble friend the Minister anticipated some of my remarks. As he said today, and as the Government have shown in other ways, the Government have been at pains to stress that none of these changes affect the substance of the legislation. I am grateful for the reassurances that my noble friend has been able to offer. However, the fear is that these changes create loopholes for those with the deepest pockets to protract and extend a legal claim. We may require the publication of some new Explanatory Notes to provide that clarity and certainty. From noble Lords’ comments in today’s debate, I feel that we may need to table some amendments to at least probe and get firmly on the record the clarity that we need.
I will explain what I am talking about, which has already been highlighted by others. It is good that judicial review remains the procedure for any appeals against CMA decisions. But can we be sure that the new merits procedure for large firms to appeal against financial penalties will not lead to the CMA’s findings on conduct being reopened? My noble friend Lord Vaizey raised that question.
Indeed, why has the requirement for the CMA to ensure that its decisions are “proportionate” been spelled out in the Bill, when it is already a fundamental requirement of it as a regulator? Why has the decision been made to swap the word “indispensable” for a new form of words in the context of countervailing benefits? As we have heard, “indispensable” has precedent in case law and is well understood by the courts.
The Government have also added a new requirement that any guidance produced by the CMA in relation to Part 1 of the Bill should be subject to Secretary of State approval. I understand why the Government want to ensure sufficient oversight of the CMA, given the very substantial additional powers provided by this legislation, but my main concern with this change is that it will give the big tech firms another chance to lobby and delay. If this new requirement is to stay, we should at the very least include a short deadline in the Bill for the Secretary of State to grant her approval.
There are two other important principles for us to keep in mind here. First, the UK’s new digital competition regime is considered better than Europe’s because it is more flexible, but it will work only if the most dominant players participate in the process from the start to help the CMA decide best how strategic markets should work so that, in the end, all players get fair terms. The word “participatory” has been coined to describe this approach; “co-operative” would have done just as well. The point is that we must avoid deterring the kind of behaviour from big tech that is critical to the regime’s success.
The second principle—this is where I come to some of the comments that were made by my erstwhile noble friend Lord Tyrie—is accountability to Parliament. When it comes to the strategic oversight of the CMA and the work of its Digital Markets Unit, parliamentarians have an important role. Some noble Lords may recall that I raised the importance of accountability and parliamentary oversight during the passage of the Online Safety Bill. My committee, and the Online Safety Bill’s pre-legislative committee, both recommended a Joint Committee of both Houses be established to oversee digital regulation, because of the increasing power and remit we are giving to regulators. The Government, though, did not respond with any enthusiasm. We must return to this, and I thought that other speakers today might raise similar points.
This House passed a Motion only yesterday to establish a new committee of your Lordships’ House to oversee financial regulators. This was news to me yesterday, but I understand that it came about because of a government amendment to the Financial Services and Markets Bill. My noble friend Lord Tyrie suggested something different from what I have in mind, but the creation of this new committee sets a precedent, which is worth further consideration and study.
I support the Bill. It allows the big firms to continue to operate and innovate while ensuring that they do not use unfair tactics to suppress competition and stifle new challengers before they have had a chance to get going. In other words, it creates the level playing field that is critical to effective and fair competition. Ultimately, that is good for the UK economy, businesses of all kinds and sizes, and British consumers. I hope the Bill will pass swiftly because, as others have said, it is long overdue.

Lord Knight of Weymouth: My Lords, it is a great pleasure, as ever and once more, to follow the noble Baroness, Lady Stowell. I particularly endorse the comment she made about having a Joint Committee, which I also made repeatedly during the course of the Online Safety Act. I am pleased to note the precedent she noticed, which I did not, and I support what she had to say. I remind your Lordships of my interests in the register, particularly as the chair of tech company CENTURY Tech and a co-owner of Suklaa Limited, which has a number of tech clients.
Like all other speakers so far, I very much welcome the Bill but, like everybody else, I think except for the Minister, I question whether it goes far enough in creating a sufficiently robust regime to hold the large tech companies to account. I do not necessarily want to bash them, but it is notable that they are particularly  wealthy and particularly litigious. If we want to have a meaningful regime, we need a robust set of regulators to take them on. In September, the European Commission listed six of them—Alphabet, Amazon, Apple, Meta, Microsoft and ByteDance—as the gatekeepers under its new Digital Markets Act. That feels like roughly a good list of companies for us to keep in mind.
I was amused to look back, just over 20 years ago, to the anti-trust case taken against Microsoft. At that time, Microsoft was the gatekeeper as everyone was using personal computers to access the internet, and the likes of Apple were pushing for the competition authority in the US, the Federal Trade Commission, to take action, so that it could free up browsers and operating systems to allow consumers to access the internet through other sources. Happily, that pressure won out, and Microsoft had to yield and lost the anti-trust case. It is now time for us to take action, in particular on the issue of app stores. I am delighted that the noble Baroness, Lady Harding, is in her place, because she and I collaborated a little, and she led, on trying to get app stores included within the competence of the Online Safety Act. There is no doubt that we are now all accessing the internet predominantly on phones and iPads. The latest data that I have seen from Statista for this country says that, in the UK, 60% of us use smartphones as the most important device to access the internet, and another 12% use tablets such as iPads. That is 72% of us going through either the Apple App Store or the Android store to access the applications that we need to access content.
How do those app stores work? If you want to collect money through them, they take a percentage of that money—roughly 30%. That is on top of VAT at 20%, assuming you are liable to pay VAT, so you have lost 50% of your revenue before you have even started. That is a massive constraint on small businesses being able to get set up. We see that Spotify—one of the companies which have tried to come to talk to me—has, as I read in the newspaper, cut 1,500 jobs today. Perhaps if it was able to keep some more of its revenue and not have it taken by one or the other of those two platforms, some of those jobs would not be lost.
But it is about more than the money: it is also about the data that those two companies can collect through their app stores and analyse to see what applications, and what features within those, are doing well. Then, if they choose to, they can create competitor applications or block applications that they are concerned about. They will not block them overtly: they will just delay the process of approval through their systems—lo and behold, another release of iOS or other operating system is published, and the apps go to the back of the queue in the test pilot system before they can get approval to get on to the app store. All that is a massive constraint on small businesses being able to access and enter the market. I was struck by the speech by the noble Baroness, Lady Hayman, on planned obsolescence—that use of the release of the operating systems to make our devices obsolete is something that a powerful regulator could really help with, in ensuring that our devices remain current.
We need to act urgently in this country, and we need to be able to act internationally as well. Does the Minister honestly believe we have enough powers in  the Bill for us to take on the really tricksy issue of these app stores? Will we be able to force them to offer alternative payment systems, so they do not cream off all the money, or systems so that, if I wanted to download an application on my iPhone, I would not have to go through the app store if I did not want to, so that we could then open up to more competition?
I move on to the issue of data a little more. In this House, I have previously raised my concern that an individual such as Elon Musk has all that data on transport movements through Tesla, on communications through his satellite company and on sentiment through his ownership of the company that used to be known as Twitter. That is just one example of a consolidation through horizontal integration, if you like, of data ownership. He, or others in similarly powerful positions, can point the same artificial intelligence machine at each of those individual data lakes, even if they are kept discrete, and get the benefit of being able to train the AI on the different sources of data and create power that nobody else has access to. That would give him a massive competitive advantage.
But it is bigger than just Musk: if you look at the amount of data that Google is collecting about us all at any given time, with all the integration that it has —or any one of the six tech giants that I listed earlier —it is a massive issue. Again, the CMA needs to have some ability to go after this data ownership issue, which is not about verticals but horizontals. I am not sure that it is within the regime or the thinking at the moment, and I would love to hear the Minister’s reassurance on it.
Like the noble Viscount, Lord Colville, I have concern around the competitive landscape for digital advertising. In the second quarter of 2022, Meta and Google made up 87.3% of total ad spend in the UK. It has fallen slightly since, with a greater share being invested in mobile-first platforms such as Snapchat and TikTok. This is in the context of online advertising spending making up 25% of total ad spend in this country. The DCMS has reviewed it and said that there is a lack of transparency and a need for action. However, at the end of its report, the DCMS says:
“In order to be ready to bring forward legislation to implement these reforms when Parliamentary time allows, we will be issuing a further consultation seeking views on these proposals”.
We have a vehicle here in the Bill. Why are we not taking action now to open up competition in digital advertising? Why are we waiting for parliamentary time when we have time now? Where is the sense of urgency from the Government around this important issue that the noble Viscount referred to?
Like others, I have looked at the correspondence on gift aid and would support action to be taken on it.
I know that the noble Baroness, Lady Kidron, who will be speaking later, has also raised the important issue of researcher access, which we came to in the Online Safety Act. Again, if we could use this vehicle to open up researcher access via the regulator to these large companies, then we could have some oversight over what is going on, so that we could inform better parliamentary scrutiny and regulation of these large, powerful and litigious organisations.
In the end, this is about the power of the internet for good and for ill. As we have heard, we have a suite of legislation before us, of which this is just one Bill, in order to create, hopefully, powerful, agile regulators who can collaborate and give confidence and safety for consumers to realise the transformational potential of technology and not the harms that we are all concerned about.

Lord Lansley: My Lords, I am very glad to follow the noble Lord, who made another of the many very valuable contributions we have listened to already in this debate. I will try not to repeat some of the important points that have already been made, which we will have an opportunity to consider in Committee in detail.
From my point of view, it is an illustration of the nature of how competition has changed in our markets. I was on the Standing Committee in another place of the Competition Act 1998, on the Standing Committee of the Enterprise Act 2002, and the Standing Committee of the Communications Act 2003, many of which are aspects of the legislation that we will be amending in this. If we had understood then the extent to which digitisation and digital markets had led to concentration of market power in relatively few hands, we would have thought that the competition regime we were establishing would have intervened to stop it.
Of course, it has not. I will come back to this in a moment, but we look at the Furman review, reporting in I think 2018 that there had previously been 400 acquisitions of nascent tech companies without any effective intervention by competition authorities anywhere. Even today, we are looking back very recently at the Competition and Markets Authority’s intervention in Microsoft’s acquisition of Activision Blizzard, which the noble Lord, Lord Fox, rightly referenced and, I think, praised its actions. But, of course, it affects only a small part of Activision Blizzard’s market penetration. It may be important in the long run—cloud computing may grow significantly—but it is not that significant yet.
It is important for us to recall that we are dealing with very large tech companies that are essentially American. The FTC tried to stop it and failed. My noble friend Lord Tyrie—he is not in his place at the moment, but will no doubt read this—was absolutely right; it is not simply the legal framework we create for our competition authorities but the manner in which the competition authorities deploy those powers that is absolutely vital. Of course, there is the consequential question of whether those competition authorities are properly accountable, and not simply whether they are doing their job well but whether we support them to do their job well—that they feel confident that the political class, as it were, will back them up.
At the time, we would have thought that the ex post interventions would have been sufficient. In the last few years, we have now realised that it will require a combination of ex ante rules and ex post interventions, and the Bill reflects that. With others, I was quite hopeful that we would make faster progress on the introduction of legislation following the Furman review. We are now over four and a half years on from the  publication of that, but credit goes to our present Prime Minister for pushing things forward since he came to office. In this respect, he is a contrast to his immediate predecessor, who one might have imagined was pro competition, but who did not actually proceed apace with pro-competition legislation. Be that as it may, the Prime Minister is doing what is right to be done.
From my point of view, there are clearly many benefits that will be derived if this legislation is effective in diminishing the opportunity for self-preferencing by large digital players. I did think—this was a very good point made by, not least, the noble Lord, Lord Fox, and my noble friend Lord Vaizey—that we must ensure fair return to intellectual property. That is linked to making sure there is transparency and choice for consumers; the relationship between those two is really important.
I will be interested to see, as we proceed, the relationship between this legislation and the European Union’s. It is not a direct relationship, but we might do a bit of “compare and contrast”, not least in relation to definitions. The noble Lord, Lord Knight of Weymouth, was talking about that. The approaches are a little different, but some of the definitions, and how they are reached, will be really important. When we look at turnover, the number of consumers and users of digital technologies, the extent to which individual players or undertakings exercise power and control over those users’ access to digital markets, and indeed the extent to which they have control over business users of those markets, the definitions are already out there in the implementing regulations of the Digital Markets Act from the European Commission. So we ourselves should look very carefully at that.
I share, and will not repeat, the points that have been made very well, not least by my noble friend Lady Stowell of Beeston, about ensuring that we maintain the clarity of the appeals standard. As far as I understand it, a JR standard includes a test of proportionality. For it to be further added in the legislation in the way that is currently proposed—I think it is in Clause 46—runs the risk that the courts will say: “Well, it must have been added for a further reason, for an additional and distinct test other than we would have understood to be normal in JR”.
The same applies to the point made about indispensability. I suggest that my noble friend looks very hard at whether the countervailing benefits exemption serves any valuable purpose or opens a very dangerous door to long litigation. We know that some big companies such as Apple have $1 billion available for their legal costs in a year; we know that it is a cost of doing business; we know they have succeeded on several occasions in delaying interventions by other competition authorities for years through legal challenges. We have to be very aware that we do not create exactly that opportunity.
I will finish with a final point on killer acquisitions. The Bill includes a requirement for notification of mergers by undertakings with significant market status. However, the Furman review went on to give a recommendation that there needed to be a specific test of
“whether a merger is expected to be on balance beneficial or harmful, taking into account the scale of impacts as well as their likelihood”.
That test is not included in the merger regime in relation to these markets in the way that the Furman review recommended. I hope that, in the course of our scrutiny of the Bill, we might look at whether we should indeed come to look at that forward-looking review of mergers, taking into account that balance; giving, as a consequence of changing the legislative framework for merger control, an opportunity for competition authorities to intervene more regularly and effectively; and ensuring that there is more opportunity for entry into these competitive markets, because these markets cannot be expected to become as competitive as we wish and need them to be without real opportunities for market entry by new entrants.
Notwithstanding that, I very much support the Bill. I look forward to what I think will be a very non-partisan approach across the House to try to ensure that the Bill achieves the purposes which the Government clearly intend and Parliament intends that it should.

Lord Kamall: My Lords, it is a great pleasure to follow my noble friend Lord Lansley. I do not say this because he is next to me and might heckle me, but because of some of the distinctions he made between rules, implementation of those rules and enforcement. I also thank my noble friends the Ministers and their officials, not only for the opening comments but for meeting with noble Lords last week, as well as the House of Lords Library and the various other organisations that have contacted us for their briefings, which have been very informative.
I refer noble Lords to my interests as laid out in the register, especially my roles on the advisory board of the Startup Coalition and as a non-executive director of the Department for Business and Trade, my work with a couple of think tanks that have published on competition issues, and others.
In some ways, I am not one of these people who is into instant gratification, but I remember being a member of the European Parliament in about the mid-2000s, when the EU Commission was considering the case of Microsoft. I remember being visited by lobbyists, including from Google, who were lobbying against Microsoft because they wanted to see a more competitive market. I remember telling them, “Just be careful what you wish for, because one day you might find other companies lobbying against you”. It has taken a long time, but it just shows how markets move. The other observation is how quickly these markets move—even definitions change. I am old enough to know when SMS actually meant text messaging; now it has a new meaning of “significant market status”.
At this stage I have only a series of questions, but before I raise them I would like to think about the matter at the heart of this debate, which is: how do markets really work? There are lots of debates about it. How do we react to markets where there are one or a few dominant firms? What do we do about dominant firms that compete not by seeking to offer the best product or service at the best price possible but by using their significant market power to block competitors?
I have to admit that, when learning economics in the past, I was fairly dissatisfied with some of the models that we were presented with. We were presented  with a fairy tale of a perfect markets with perfect information—“If everyone had all this information, this is the way markets should work”. Then we were given a few variations—the oligopolistic market, the monopolistic market, the monosoponistic market, but they are not real markets—and then we were told by our economics tutor that actually markets do not work like that at all. There are market failures, and we need government intervention.
When I look at this from first principles, one of the views that I find attractive is the one that made me consider the hundreds, thousands, millions or billions of transactions that occur every day between willing buyers and willing sellers. It is the aggregate of these transactions that creates the spontaneous order of markets. Markets are not perfect, and there is imperfect and asymmetric information. Not everyone has the same information. Entrepreneurs are the key to these markets because they spot opportunities that others may not have spotted and they are prepared to take risks to take advantage of those opportunities and asymmetries, which the economist Israel Kirzner referred to as entrepreneurial alertness.
What happens is that, soon after, other firms enter the market and try to compete on quality of product, service or price. Governments from first principles can either get in the way or get out of the way. While I would prefer Governments to get out of the way as much as possible to allow thriving markets, there will be occasions where some of these new companies will become so large that they dominate the market. In these cases, we need to consider if and how regulations can provide a framework for competition and prevent abuse by dominant players.
I was very much taken by the comments of the noble Lord, Lord Knight, who eloquently gave examples of how companies that were once seen as entrepreneurial, exciting, new and whizzy are now abusing their significant market status. However, in considering the Bill we also have to consider how digital markets may be different from other markets, such as those for physical products, even though many physical products are sold online today. While a firm may be dominant in one part of the market—for example, on search or devices—it may not be dominant in another.
I have weighed up the advantages of judicial review versus merits-based decisions, and especially of getting the balance right between not punishing the big firms for being successful and innovative and their significant market status allowing them to become gatekeepers promoting their own products over rivals’ products or, as has been alleged, search engines and app stores imposing unreasonable charges. Like many noble Lords, I have come down on the side of judicial review, mainly to speed things up but also to avoid larger firms with their armies of lawyers delaying the process, which may lead to smaller competitors going out of business before the end of the case. However, we now see that firms can appeal this penalty of the judicial review process so, like other noble Lords, I ask the Minister to say how long the Government expect the appeal process to take. If a firm lodges an appeal, is there a danger that it may delay the main decision further? If a large firm wins a penalty, will it then have  grounds to challenge the original decision delaying the remedy further? The Minister may well say that will not happen, and it would be reassuring to hear that from him at the Dispatch Box so we understand it.
Like other noble Lords, I am interested in the counter- vailing benefit exemption. What is the thinking behind the use of “countervailing” rather than “indispensable”? As many other noble Lords have said, it is legally defined. What extra does “countervailing duties” or “countervailing exemption” give to the Bill and what is the justification? Can the Minister assure noble Lords that “countervailing” will not act as a loophole for dominant firms to escape their responsibilities?
One of my other concerns more generally—I know it is shared by noble Lords from other parties across the House—is that over time Governments delegate responsibilities to agencies or regulators, as well as to international organisations. I teach politics, and one of the things we teach is principal agent theory, where a Government delegates authority to an agency or a regulator, but that regulator may pursue an agenda different from the one expected of it. There is real concern about accountability, but also about who regulates the regulator. That is why I welcome the comments by the noble Lord, Lord Tyrie, and my noble friend Lady Stowell about accountability to Parliament. Perhaps across the House noble Lords should pursue the solution of a committee.
I suspect that the proposed power in Part 1 for the Secretary of State to review CMA guidance may be a way to tackle this issue. I would like to hear the Minister’s justification for granting this power to the Secretary of State and whether this may slow down decisions, especially in a fast-moving market. Does the Secretary of State really need these powers? Will noble Lords have to propose a timeframe for these decisions to be made if there is no timeframe for quick decisions? I should add that I have met people who work for the CMA and have been impressed by their knowledge and their understanding of some of these deeper philosophical questions of markets and some of the trade-offs they have to consider. It is not an easy job to balance innovation, markets and concentration.
There are a couple of other things. I welcome the action on subscription traps. There is probably consensus across the House. It recently took me more than two hours and disconnected calls to leave the broadband company that I was with. When I went online to read customer forums, thinking I had been hard done by, I realised I was lucky. It was like the Monty Python sketch: “Two hours! That's absolutely nothing! You don't know hardship!” I saw one comment where someone said they tried so often that they gave up for one year and tried again the year later because it just was not worth it; they just were not getting through. We also read of dirty tricks by companies disconnecting calls or leaving customers to hang on for ages.
I understand that companies are desperate to hold on to their customers. I understand why customers looking to leave companies or end their subscription are redirected to customer retention teams. When I was a consultant to telecom firms, the figure we used was that the estimated cost of new customer acquisition was seven times that of customer retention—but you  keep customers by offering a service that they are happy with and they are happy to pay the price for. You do not keep them by engaging in these dirty tricks. In 2021, the Government promised to make it easier to switch broadband provider—as easy as it is to switch mobile operator—with a so-called one-touch switching system, but broadband companies failed to meet the target April 2023 deadline. Will the Minister say when one-touch switching will come into effect? Perhaps noble Lords have to ask what more pressure we can put on the industry and the CMA to look into this delayed implementation. As my noble friend Lord Lansley said, we have the rules but how do we make sure they are enforced? Why are companies dragging their feet on one-touch switching?
A number of noble Lords have talked about the last issue I will talk about, which is the fact that we have all been contacted by charities. I will not go into details because they have already been laid out by others, but I think we would like a response from the Minister on charity subscriptions. I add one word of caution. Charities may also behave in a way to try to keep their subscribers or donors. Let us not give them a blanket exemption, but let us understand the issue that they are lobbying on.
Overall, like other noble Lords, I welcome the Bill. I look forward to hearing the Minister’s comments and answers to my questions. I look forward to working with my noble friends the Ministers and other noble Lords in creating the appropriate framework so that the UK continues to be a leading digital market for local and international firms.

Lord Etherton: My Lords, I wish to address three short but important points. The first two concern redress or means of redress by consumers and small businesses. The third concerns the point which has been raised by a number of Members of the House about charities and subscription contracts.
The first issue concerns the absence of provision for collective proceedings by consumers and small businesses. Chapter 7 of Part 1 deals with enforcement and appeals. Provision is made for individual claims in the Competition Appeal Tribunal or to a court for breaches of requirements, such as conduct requirements and pro-competition orders following pro-competition interventions.
There is no provision in the Bill or elsewhere enabling consumers and businesses to make a collective redress claim where multiple parties have been harmed by the same breach. In many cases, individual consumers and small businesses will be unable to finance proceedings. Furthermore, the knowledge of the likelihood of such difficulty will be a disincentive for those who are subject to conduct requirements and pro-competition interventions to comply with their obligations.
Provision for collective proceedings—which, colloquially, are generally called class actions—is made in the Competition Act 1998, as amended by the Consumer Rights Act 2015. That provision, however, applies only to breaches of competition law. For these reasons, I would urge the Government to make provision in the Bill for a collective actions regime, borrowing, where appropriate, from that which applies already in the case of breaches of competition law.
The second issue I wish to raise concerns alternative dispute resolution schemes for consumer disputes under the Bill. Part 4 of the Bill deals with “Consumer Rights and Disputes”. Chapter 4 of Part 4 addresses the issue of ADR and supplementary provisions are to be found in Schedules 23 to 25. Aside from the imposition of a duty on traders to notify consumers of ADR arrangements, the provisions in this part are concerned essentially with the terms of accreditation of ADR providers.
What is lacking is any provision for making ADR schemes more accessible for the resolution of disputes, or even any provision for a review of potential ADR arrangements for the inexpensive, speedy and efficient disposal of consumer disputes. Resort to court proceedings will always be expensive and time-consuming. It is well known that current delays in the delivery of civil justice are considerable.
For these reasons, I suggest that the Bill should provide for a government review of ADR for consumer disputes so as to make it accessible, inclusive and appropriate for the needs of all consumers, regardless of age, income, education level or vulnerabilities.
Finally, I turn to a question that has been addressed by a number of your Lordships: the impact of the Bill on subscription contracts and its application to charities that provide membership benefits and also rely on Gift Aid when donations are made. Chapter 2 of Part 4 the Bill addresses the topic of subscription contracts. The important point is that it makes provision for those contracts to be subject to a right on the part of the consumer to terminate the contract and secure a refund. The effect, in the case of charities, is that the Gift Aid programme cannot apply to those donations.
This is a matter of great financial significance to charities large and small. In its briefing, the Royal British Legion points out that it has 194,000 members, 38% of whom have Gift Aid subscriptions. That Gift Aid represents approximately 10% of total RBL membership fee revenue. This could have an obviously very detrimental effect.
The description of a subscription contract in the Bill is
“a contract between a trader and a consumer … for the supply of goods, services or digital content by the trader to the consumer in exchange for payment by the consumer”,
and a trader is defined as acting for the purposes of a business. It is difficult to understand that the Government intended, without much clearer words, to embrace the concept of subscription contracts membership donations paid to a charity, because of the type of benefits conferred on donors by charities such as RBL.
So I ask the Minister to tell us, in his reply to this debate: is it the Government’s intention to include charities in these provisions? If it is their intention, were they aware and conscious in making that decision of the impact on Gift Aid? If it was not the Government’s intention to include charities in these provisions, they should be expressly excluded, in Clause 253 and in Schedule 20 to the Bill.

Lord Black of Brentwood: My Lords, it is a pleasure to follow the noble and learned Lord, and, indeed, so many speakers who have made such powerful points, with which I am overwhelmingly in agreement.  There is a danger that I might sound like Little Sir Echo. I declare my interest as deputy chairman of Telegraph Media Group and director of the Advertising Standards Board of Finance, and I note my other interests in the register.
Like other noble Lords, I wholeheartedly support this legislation. As we have heard, it has been the subject of countless studies and consultations over many years, dating back to Dame Frances Cairncross’s admirable review—even before Furman—of the sustainability of the press, which concluded that
“the unbalanced relationship between publishers and online platforms”
threatened the future of journalism, and recommended that
“these platforms should be required to set out codes of conduct to govern their commercial relationships with news publishers”.
That review reported in early 2019—nearly five years ago—since when the commercial position of the press, and in particular the local and regional press, has deteriorated significantly. So, as we have heard many times, this has been a long time coming—but it will have been worth the wait, as long as we now get on with it without delay.
This legislation is hugely important because it delivers on so many different policy fronts. It is a policy for economic growth because, with the creative economy at its heart, it will open up digital markets, allowing UK businesses to innovate and grow. It is a policy for fairness, ensuring that the giant, unaccountable tech platforms deal with publishers on a level playing field. It corrects a dreadful imbalance in market power, which springs from the fact that, essentially, two foreign companies now take 80% of UK digital advertising but do not agree fair and reasonable terms for the content that powers their operations.
It will be good for consumers, as each UK household now pays over £200 more each year than it should for its online purchases as a result of the stranglehold on the ad market exercised by Google and Meta. It is also an investment in the future of trusted, authoritative journalism at a national and local level, which will be in deep jeopardy if there is no correction to a deeply distorted market, which means that publishers do not receive anything like a fair share of digital advertising revenues.
Finally, it delivers on perhaps one of the most important areas with which we, as parliamentarians, will have to grapple in the future: artificial intelligence. It is not quite “oven ready” but it is certainly “AI ready”, because it could also provide a route for publishers to negotiate the fair use of their content by AI systems. Without adequate compensation in this way, the commercial sustainability of content providers will progressively erode and, in the long term, fail.
Before coming on to some of the detail of the Bill, I want to explain why I think it is so essential. First, it is now crystal clear that the anti-competitive practices of the global monopolies are harming the UK economy. The CMA estimated back in 2018—the position will be much worse now—that Google and Facebook made excess UK profits of £2.4 billion in digital advertising. Those excess profits did not come from a free market but from the unashamed leveraging of market power. It is a closed market.
Secondly, it is equally clear that the big tech platforms benefit hugely from the content produced by publishers, both with advertising shown around the news, and the data obtained by platforms that interact with that content without paying for it. Again, the CMA has found that adtech intermediaries, in a market dominated by Google, capture over a third of the value of the ad space on publishers’ websites. The fact that people can find trusted news there makes them return more frequently, further expanding the market of the duopoly—a point made by the noble Lord, Lord Fox. It is a virtuous cycle generating cash for the platforms, but a vicious cycle for those investing in regulated news and investigative journalism.
Thirdly, the Google and Meta duopoly have become “must have” services for publishers because that is where people go for news. Google’s search engine is second only to the BBC as the most used online news website for people seeking news. This has produced a profound fault line in the operation of the market: publishers are at the mercy of big tech and have no choice but to accept their terms, leading to a position of clear market abuse.
The establishment of the Digital Markets Unit will correct these and many other faults. Publishers will be able to negotiate fair terms for the value that news content brings to platforms, and, as we have heard, if they refuse to comply then a final offer mechanism will be deployed, with each party submitting bids and the fairest offer selected. The DMU will ensure that publishers receive a fair share of revenues for advertising shown around their content and receive user data when consumers interact with their content. Unfair app-store terms will be prevented, allowing publishers to build sustainable subscription businesses.
As with all Bills that come here, we need to scrutinise it properly to ensure that it delivers what it says on the tin. There are a number of issues that we need to look at very closely. One area that we must guard against is importing anything into the DMU’s procedures that would allow the platforms, as we have heard, to deploy delaying tactics. They have the money and the legal clout to slow dispute resolution down to such an extent that the terms of the Bill could, if allowed to do so, become worthless.
A good example is the countervailing benefits exemption in Clause 29, as many noble Lords have mentioned, which would allow the DMU to close an investigation into a breach of conduct requirement if a big tech firm could demonstrate that its anti-competitive conduct produced benefits that outweighed the harms. The Government’s original policy intention was to ensure that this should be used only in the most rare and exceptional of circumstances, but, as the noble Lord, Lord Bassam of Brighton, said, amendments in the Commons have watered that down by introducing an untested and uncertain standard. It is not at all clear why that change—moving away from the recognised competition law standard of “indispensability”—was necessary. We need to return Clause 29 to its original wording, or indeed get rid of it altogether, otherwise the big tech firms will simply be presented with a “get out of jail free” card.
Also concerning are the powers given to the Secretary of State to approve CMA guidance, a point made by the noble Viscount, Lord Colville of Culross. That  guidance will be crucial in setting out how specific digital services should comply with the Bill’s conduct requirements, allowing the pro-competition regime to be proportionate and targeted. In a system designed to regulate rapidly moving digital markets, any delay could seriously undermine the CMA’s ability to target consumer harm. As several noble Lords have said, there must be a time limit for the Secretary of State’s decision.
We have heard a lot about the maintenance of the judicial review standards, but again those have been watered down for appeals on penalty decisions. There needs to be absolute clarity in the Bill on the very limited area covered by the so-called full-merits appeals, so that it does not bleed into other parts of the system.
We should also consider in Committee the way in which the final offer mechanism will work. At the moment it is a last resort, quite rightly, but it is one that could become such a distant prospect that publishers were forced to accept sub-optimal terms simply because of the pressing commercial imperative to do so quickly.
The part of the Bill that concerns me most is Part 4, relating to subscriptions. Like everyone else, I applaud the aim of tackling the nuisance of subscription traps, but we need to make sure that the day-to-day operations of reputable traders are not adversely impacted by the measures designed to achieve this—particularly publishers, such as the one I work for, which are building sustainable business models through subscriptions. Subscriptions provide many different types of businesses with a degree of certainty in order to invest in their operations, but I fear that we risk undermining some of that certainty with the measures in the Bill at a challenging economic time for many traders.
The severity of the measures in the Bill treats all subscriptions as though they were an endemic problem and unwanted by consumers, when that is not the case. By the Government’s own analysis, four in five adults in the UK have at least one subscription—and often many more—yet only 5% of subscriptions are unwanted. There is a danger that we are creating a sledgehammer here to crack a nut. As an example, under the terms of Clause 258, traders will be required to establish procedures that enable consumers to terminate subscription contracts in a “single communication”. That could have many unintended consequences which, ironically, disadvantage the customer, not least because many are often happy to take advantage of discounts and price offers that arise during their exit journey.
There are also potential problems with the cooling-off period. Clause 262 largely retains the 14-day cooling-off period under EU law, which starts the day after the day on which a contract is entered into. However, the Bill introduces a so-called renewal cooling-off period which, for instance, occurs when an annual subscription renews. That is an unnecessary expansion of the existing regulation without any evidence that it is needed, and it is hardly a Brexit dividend to impose even harsher regulations on British business than the EU does.
In a Bill intended in part to ensure the sustainability of journalism, with business models often based on subscription income, some of the measures introduced in the Bill, ironically and dangerously, point in the opposite direction. We must correct that. These are  issues that we will scrutinise in Committee with our usual vigour. None of them is insuperable and I hope that, as with the Online Safety Bill, my noble friend the Minister will engage in constructive debate. As I said at the start, I wholeheartedly support the Bill. It has been a long time in gestation, it is supported by all the parties in Parliament and it has been endlessly consulted on. Let us now get on with it without delay and in that spirit of consensus on these issues that binds us together.

Baroness Bennett of Manor Castle: My Lords, in that spirit of consensus, I declare my former position as editor of the Guardian Weekly. Noble Lords will find an unusual degree of confluence between what you might describe as the two ends of the media spectrum, in that I very much agree with the noble Lord, Lord Black, on the issues of artificial intelligence use and the digital giants’ use of material coming from mainstream and private publishers without declaring or making fair payment for that.
There are so many Bills coming through alongside this one that I am not sure where this next issue belongs, but much of what is described as generative artificial intelligence is actually plagiarism on a giant scale. I declare a meeting last week with UK Music, which is very much pushing for the idea that the source material of anything that is generated through these kinds of technologies needs to be declared, as well as the way in which it has been generated. These are issues that need to be raised.
A number of noble Lords declaring their creative endeavours made me think that I should declare that I have a book forthcoming in April, Change Everything: How We Can Rethink, Repair and Rebuild Society, published by Unbound.

Baroness Uddin: Hear, hear!

Baroness Bennett of Manor Castle: Thank you. I have an interest in seeing that that is not open to being rehashed, reused or recycled without my consent, yet as far as I am aware we have no capacity to do that. That is something we need to think about in this Bill and more broadly.
It is a pleasure to take part in a debate in which we are seeing an unusual degree of consensus. Noble Lords have had plenty of time to prepare for the passage of the Bill through your Lordships’ House. It is widely acknowledged to be necessary and it is broadly headed in the right direction, so the department needs to be warned that that will probably produce a strong desire to improve it in Committee and on Report. I am reminded of the most recent similar Bill that I can think of, which is what is now the Domestic Abuse Act, which left this House a lot stronger than it arrived after a lot of consensual and constructive cross-party contributions.
As many have said, the Front-Bench contributions have been very informative. I will pick up one point from the Minister: I do not share the enthusiasm for unicorns. Unicorns have often turned out really to be phoenixes that crash and burn but then are not capable of rebirth, at great cost in human and financial suffering.  As many noble Lords have said, we have an ecology that has seen many exciting, new and creative independent businesses swallowed up—minnows swallowed up by sharks—and we need to think about how we can create a different kind of ecosystem. It is worth focusing on the fact that the digital world was born into an oligarchic system, where a big four—or perhaps a big five or six —dominate all sectors of our economy, so it is perhaps not surprising that we have arrived at a system with very little diversity in it and a few large players.
My aim is not to repeat what has already been said, so I am going to tick off some points that have been well covered. On the issue of subscriptions to charities, mentioned by the noble and learned Lord, Lord Etherton, among many others, I would note that one of my favourite charities, English Heritage, is among those that were very concerned about this issue. It is clearly something that your Lordships’ House will need to address.
Picking up from the points made by the noble Lord, Lord Black, on the issue of small, independent news providers I think that many noble Lords will have received a briefing from the Public Interest News Foundation—some have referred to it. We desperately need local news, supporting local democracy and local communities, and these are areas where we desperately need action.
I associate myself also with the speech of the noble Baroness, Lady Hayman, not currently in her place. Right to repair is something that I have long been working on and I look forward to seeing what we can do in that area, so I will not repeat any of that.
We could hear the passion of personal experiences in how many noble Lords focused on the difficulty of ending subscriptions. My suggestion to the noble Lord, Lord Vaizey, is that if you do not know the CEO, you need a strong social media following. A grumble on social media is often very effective. I would like to think that, if we did that enough, it might have some impact on encouraging companies to do a better job of allowing people to escape from subscriptions that they no longer wish to have.
However, I shall focus the main part of my speech on an area that I believe no noble Lord has yet covered, by looking at the issue of advertising. We are all of us, both online and through screens in train stations, on roads and in many other places, exposed to thousands of digital advertisements more or less daily. It is really crucial that, to protect consumers from misinformation and harm, advertising needs to be properly and thoroughly regulated. However, we currently have a system that is slow and opaque and is definitively failing. The UK’s Advertising Standards Authority is not an independent regulator; it is self-funded by the advertising industry. Any complaints which the ASA handles are essentially therefore marking its own homework, so we need to look at this regulatory gap as a matter of urgency. We should have a regulator that is independent and transparent and one that can take timely action.
I will focus on the role of the companies that are advertising products in terms of producing waste, pollution and environmental harms, and ignoring human rights. Recent research published by the Financial Times  shows that Shell, one of the world’s top polluters, is estimated to have spent £220 million on advertising in 2023, much of that explicitly aimed at younger people. I have to share a case study of one of my favourite examples of this because its sheer uselessness and inaccuracy has to be noted. A couple of years back, going through the Eurostar terminal, I peered around a corner into an entirely unused area of the terminal where there was an advert from Exxon about plans for green energy from algae—something that Exxon has subsequently got out of entirely. At the time, the company was defending itself about this and its spokesperson said that the company had spent more than $350 million trying to develop biofuels from algae, which was more than double what it spent on advertising—greenwashing, anybody?
It is worth noting that, if noble Lords go back to when the Government first announced the Bill, we were promised protection from greenwashing. That was going to be a central part of the Bill, but in the Minister’s introduction we heard no similar focus on the protection from greenwashing that we are looking for. I would suggest that we can go further than protection for actively misleading issues, and I will look to table amendments on this.
In this climate emergency, as we speak in the middle of the COP 28 talks, we need to acknowledge that advertising is a push factor for the generation of a massive amount of unnecessary carbon emissions. The Green Party is calling for a ban on high-carbon advertising—fossil fuels, flights and SUVs are major examples, but it might also include fast fashion, meat and dairy and the banks that are funding the likes of BP and Shell. I can feel your Lordships wincing at this point, but I would point out that there is no right to advertise. We have a choice to decide what our society looks like and what people are bombarded with. We do not have to say, “It’s open slather and you can do whatever you like”. An obvious area for this is cigarette advertising, on which we have long had tight controls, but I also note that Transport for London now restricts advertising on a range of products including junk food and is close to banning gambling promotion. France and Amsterdam are also looking at working on banning high-carbon adverts. We can choose what the future looks like.
There is so much to do, but I finish on the point of how so many of the Bills that your Lordships’ House is dealing with are interrelated. I do not think anyone has yet referred to the fact that we are speaking in the “fraud capital of the world”—I am quoting UK Finance here—and we really need to cross-reference this with what is happening in financial advertising. It is a huge problem that consumers need so much protection from.

Lord Holmes of Richmond: My Lords, it is a pleasure to take part in this Second Reading. In doing so, I declare my interests as set out in the register, as an adviser to Ecospend Ltd and Boston Ltd respectively, and as a member of the board at Channel Four Television Corporation. I would like to talk briefly about the opportunity, then the Bill at large and then make some points on specific elements within it as currently constructed.
There exists a huge opportunity for the UK with the new technologies that we have available to us. If we conceive of them as tools in our human hands—yes, incredibly powerful tools but in our human hands, led by our human heads and hearts—that will give us the greatest chance of success for small, medium and potentially successful unicorn businesses, right across the United Kingdom. Some of the greatest elements of these technologies are that you do not necessarily have to be in the capital, or indeed in a city at all; you can have an international business with a laptop and a decent broadband connection from your bedroom. When we look at how we can combine those new technologies with the great good fortune of the United Kingdom’s financial services sector, and perhaps the most prized and often underrated good fortune that we have, which is English common law, the potential that we have individually and collectively as a nation—one that is looking out to connect internationally—is as good as infinite.
What we really need to see as a golden thread running through the Bill is that everything we do in this space is inclusive by design. Everything is predicated on the fundamental truth that it is our data—our decisions, our intellectual property and our copyrighted content. None of these platforms or huge businesses has very much at all without our data, our ID and our copyrighted content. We need to address, legislate and regulate for this fundamental truth.
The Bill itself is not small and it is getting bigger. Perhaps more concerning from a parliamentary perspective is that, when it entered Second Reading in the House of Commons, it had 35 Henry VIII clauses. As we start Second Reading here, that number has risen to 43. I calculate that to be a Tudorian rate of inflation of around 23%. I ask my noble friend the Minister: is this the way the Government wish to legislate? Does it make sense to have an increasing number of such clauses in our primary legislation? As we already have 43 of them, will the Minister confirm that they will all be subject to the affirmative resolution procedure?
It is a big Bill, and noble Lords have covered many of the issues eloquently and effectively at this stage. I will go relatively rapidly over a few areas I think are worthy of consideration. First, on the Competition and Markets Authority, our regulators are nothing if not independent. We have some of the most respected regulators around the world, but, if their independence is even perceived to be called into question, they and we have a problem. As we saw in our discussions during the passage of the Financial Services and Markets Bill, independence should never be confused with accountability and parliamentary scrutiny. It is absolutely essential that the regulators must be accountable to Parliament. There must be the right scrutiny mechanisms in place. As we heard earlier in the debate, we need that level of expert input so that a parliamentary Select Committee can effectively hold these regulators to account.
So that is accountability and scrutiny: good. But, on encroaching on independence, perhaps less so. Is it wise, as currently constructed in the Bill, for the Secretary of State to have sign-off powers over the guidance that will come from the regulator? That seems to go well beyond any sort of normal arrangement between  government and an independent regulator. Similarly, when talking about the CMA, the Bill is peppered with references to proportionality and being proportionate, but the CMA already has to operate in a proportionate manner. So what do these additional references to proportionality add? Do they not potentially lead to confusion and less clarity for both the regulator and those who will find themselves regulated?
As many noble Lords have commented on, I am similarly concerned by the introduction of the full merits test when it comes to fines issued by the regulator. It is fairly clear, as the Bill is currently constructed, where the difference is between full merits and JR. But why are we taking a full merits approach when no other economic regulator has such an approach put upon it? We do not even need to reach back 25 years, or five years indeed, into history. Why do we not go for one of the most recent pieces of legislation, which many noble Lords present were involved with—the Online Safety Act? When it comes to fines issued by Ofcom, there is no full merits procedure there. Why are we looking at a different approach in this piece of legislation, as it is currently drafted?
Moving on to pricing and payments, the Government have spoken often, and rightly, around the present problem of drip pricing. Yet there is currently nothing in the Bill to address it. I ask my noble friend the Minister why this is. Would this Bill not offer the ideal opportunity to address the practice of drip pricing, which so many people find themselves on the wrong end of? Similarly, when looking at leveraging principles, would we not wish to strengthen the Bill in that respect? Otherwise, the potential danger is that—to take the app example so eloquently pointed out by my friend the noble Lord, Lord Knight of Weymouth—those prices, that 30%, simply gets moved and applied to a different part of the ecosystem. It could be moved, applied again, and thus nothing would be achieved from this legislation as currently constructed.
As other noble Lords have commented, I agree that we have to address the issue around charities and gift aid. I would probably be more in the camp of my noble friend Lord Kamall, in that we should consider this carefully, rather than simply saying “There’s an issue around Gift Aid” and drafting a blanket exemption. We want to consider this carefully and come up with some more elegant drafting around this point.
As I already stated, none of this is anything if it is not predicated on being inclusive by design. A key strand within that is obviously accessibility. There is a real problem with the Bill as currently constructed if we want all these markets and platforms to be accessible for all. Although Clause 20(2)(C) talks about the information describing the activity needing to be accessible, the Bill does not require the activities—the platforms themselves—to be accessible. Buildings were designed 500 years ago with no thought of accessibility or disabled people, yet, in the main, they have now been made pretty accessible. For example, take the Palace of Westminster—a grade 1 listed building. It is not perfect by any means, but it is pretty accessible, and a great job of work has been done. Why would we seek to rebuild steps and inaccessibility in cyberspace when all these markets are constructed, if you will, on completely greenfield sites?
Inaccessibility and exclusion will happen if the concept of “inclusive by design” is not written right through every element of the development and deployment of these platforms, and thus into the digital markets we describe. So would it not make sense to look at, for example, the Public Sector Bodies (Websites and Mobile Applications) Accessibility Regulations 2018, and seek to draft some amendments to that effect so that we truly have not just accessibility around the information but accessibility around the activity, service, platform and market? Those regulations are more effectively drafted and are practically implementable. They look to the international web of accessibility guidelines. Would the Government not wish all the platforms and everything in this digital markets Bill to be rooted in such firm grounding?
In some final collected thoughts, I will also comment on the right to repair. In your Lordships’ House and the other place, rightly we often talk about resource and resource matters. But we should also talk much more about resourcefulness, and how we make optimum use of the resource we have. It seems perfectly logical and timely, if not urgent, to have something in this legislation around a right to repair. Similarly, can I ask my noble friend the Minister what the budget will be for the DMU? It is being given quite a task. Although we have a full range of regulators across many sectors of our economy and society, one significant issue, which cannot be denied, is that if we do not fund them to the right level, we cannot then criticise or be disappointed if they are unable to do their job as Parliament intended. Similarly, when will the Government look to quantify many of the measures set out in the Bill—currently largely white space?
Finally, we are talking about ex ante regulation, or EAR. We need to ensure that everybody is listening when we reach Committee, and we can then approach the Bill collectively, in a participatory manner and with those golden threads of inclusive by design and those fundamental truths again—that it is our data, our decisions, our legislation, our regulation and our digital futures.

Baroness Ritchie of Downpatrick: My Lords, it is a pleasure to follow the noble Lord, Lord Holmes of Richmond. I welcome the Bill, but there are some improvements that the Government could bring forward to provide better protection against the big tech giants. I feel that many of today’s arguments have coalesced around several points. The Bill deals with various aspects, and there are concerns that it does not contain any explicit environmental content. Reference has already been made to that. It makes no progress in plugging the gap in environmental reporting of food and drink products, it does nothing to extend repair as a consumer right, as the noble Baroness, Lady Bennett, indicated, and there are issues around gift aid. All that needs to be addressed.
However, I want to concentrate this evening on the need for the Government to strengthen the legislation through government-based amendments introduced at Committee or Report to enable better and more effective regulation for big technology companies.  Undoubtedly the Bill can launch a ground-breaking framework to regulate a remarkably unbalanced digital marketplace in the UK. It is a market in which tech giants such as Alphabet and Meta hold near-complete control over every aspect of nearly every online transaction. While digital technology has given journalists new opportunities to engage with the communities that they cover, the dominant tech firms have positioned themselves as central intermediaries, through which most news content must pass to reach citizens. This allows them to capture data about the use of the content by consumers, sell advertising based on that use, and capture value created by news and information firms. They hoard a lion’s share of advertising revenue, nearly 80% of the digital advertising market, as well as valuable user data generated for them by news providers, while the providers struggle to keep their lights on. I have seen examples of that in Northern Ireland.
With that system in place, the news publishers that have to interact with the giants lose out, especially those that are locally owned and operated. When they suffer, their audiences—citizens right across the UK—lose out as well. The independent news sector online is made up of several hundred publishers. Millions of residents in hard-to-reach local communities, such as those in distinct rural communities in Northern Ireland, rely on them for fact-checked and trustworthy information about all facets of their lives. It is a sector that has been given many reasons to feel as if it was abandoned by the UK’s policymakers. With appropriate policy measures, it also stands to gain the most out of our action. Using proper interventions, we can allow it to continue enriching the lives and democratic participation of the UK’s communities at every level.
In 2022, the Public Interest News Foundation estimated the UK independent news sector’s total revenue at £20 million to £40 million. In the same year, take note that Google and Meta generated an estimated £16.1 billion in UK advertising revenue. We should contemplate that contrast in resources. According to Press Gazette, the overall digital advertising market in the UK grew this year, but none of the fresh spoils will go to the publishers working diligently to inform the public. Undoubtedly, this system must be remedied; with certain amendments and considerations, this Bill can sit among a much-needed set of holistic interventions. It can help to introduce sustainability to the news industry, and in particular help the independent online news sector to survive and flourish. In many instances, it is providing local news content to local communities.
The Bill should allow the CMA to use the final offer mechanism more flexibly and earlier in the regulatory process; reduce the potential to politicise regulation by limiting the vast oversight powers given to the Secretary of State over the Digital Markets Unit; allow for countervailing benefits to users to be considered at the many consultation and investigation stages of regulation instead of being used as a “get out of jail free” card by tech giants; promote a competitive and pluralistic UK press by instructing the CMA to consider citizens’ rights as it regulates the digital marketplace; ensure that as many actors as possible can trade with SMS firms on fair and reasonable terms by mandating transparency with the regulator and, when appropriate, the market; and ensure that the expanded merits-based  appeal to penalties imposed on SMS firms does not undermine appropriate regulatory decisions made after due process at earlier stages in the new framework.
I hope that the Minister will reflect on those suggested proposals for amendments in this sector and consider bringing them forward in Committee or, failing that, on Report. Such amendments would enable and bring about an improvement to the Bill, put certain checks in place in respect of the big tech companies and provide for their better regulation, which is urgently required. I urge the Minister today to reflect on those proposals and provide answers and some direction about the next steps from the Government.

Baroness Kidron: My Lords, it is a pleasure to follow the noble Baroness, Lady Ritchie of Downpatrick. I declare my interest as set out in the register as adviser to the Institute for Ethics in AI at Oxford and the Digital Futures Commission at LSE, and chair of 5Rights Foundation.
Like other noble Lords, I welcome the Bill. I can claim to be an enthusiastic advocate for democratic oversight of the power of tech, corporations, their products and services and the externalities on society. While my primary focus is on the detail of the regulatory regime brought forward by the Online Safety Act and the opportunities and problems of the upcoming Data Protection and Digital Information Bill, this Bill represents an enormously important piece of the puzzle of digital regulation. I hope that the Minister has recognised the warm glow of agreement across the House, which we put to such good effect during the passage of the then Online Safety Bill, and that we will have a similar outcome during the passage of this Bill.
One aspect of working on digital regulation is that however fundamental it is to the lives and outcomes of UK citizens, its importance is often obscured by language and concepts that very few people engage with—holdover computer power, large or specialist datasets, automated decisions, synthetic information and so on. It means that debates like the one we are having today and the public discourse outside your Lordships’ House are confined to small interest groups. Yet I am often struck by the number of times somebody raises with me the feeling of being forced into using certain products; the fierce hold over small business by the app stores and search; the powerlessness of creators; or the ubiquity and damage that fake reviews do to both legitimate businesses and unsuspecting consumers. Or they simply express the idea that the deal they thought they had made is not the deal they got.
Any concentration of power is disfiguring of democratic societies and ultimately consumers come to feel that asymmetry of power, even if they cannot speak to it. The concentration of market power in the digital marketplace is no different. Here, I want to make it utterly clear that the tech lobby move to make consumer benefit the paramount criterion for exercising DMU judgment must be looked at in detail in Committee. Consumers often have long-term interests that are vastly different to the shiny, superficial, short-term consumer gains so often trumpeted by the sector.
Before the Government published their amendments on Report in the other place, I was asked what I thought of the Bill by someone rather senior. I replied,  somewhat jokingly, that it depended almost entirely on how successful the tech sector lobbying over the summer had been. That is about the size of it. What the Government put forward was a thoughtful and robust legislative proposal which sought to deploy greater nuance than similar proposals in other jurisdictions. Happily, while the worst of the lobbying has not materialised in the Bill, I am afraid that it remains the case that, were the Government to hold firm and to set the final bar closer to where it was before Report, it would be rather better for it. I will quote the noble Baroness, Lady Stowell, who wrote in an article in the Times—rather brilliantly:
“This is a bill the government got right the first time, it must not now second-guess itself”.
Today, I want to briefly raise a number of points that I am sure we will look at in great detail in Committee. Many of them have been raised by others, so I will try to do so quickly. Over the last decade, I have repeatedly seen regulators going toe to toe with companies with seemingly unlimited resources and falling back on “advising”, “working with” and “taking on only the winnable action”. The Bill as it stands enforces many duties on the CMA to consult and consider representations during its work. In the context of litigious companies with limitless cash, this encourages regulators fearing judicial review to consult on what the rules should be, rather than publishing their regime and inviting the sector to raise reasonable concerns. It is the perfect route for regulatory capture, and I am afraid I have seen it elsewhere. We are making the law, and the regulator, not the industry, should interpret Parliament’s intent. I wholly support, and I practise, high engagement with the sector, but a regulator must not be strung up by requirements such as those in Clauses 6, 20, 114 and others.
For the same set of reasons, I trust that the counter- vailing benefits clause, Clause 29, will get the full power of scrutiny from your Lordships’ House. It must not become a corridor by which strategic market status firms can avoid requirements set out in the Bill. It is the statutory duty of the CMA and DMU to promote competition: surely, in the digital context it is those firms that hold the most power that we most want to regulate to allow a rich environment for challenger and growing businesses, as well as consumer benefit.
I strongly support the push from publishers, including small and independent publishers and groups such as the Public Interest News Foundation, for the Bill to be amended to include citizens’ interests to be considered for a competitive, pluralistic press in this country. Such an amendment would align with the advice from the Digital Markets Taskforce, which advised the Government on the regime as the Bill was being developed. I think it would also send a strong and unequivocal signal that your Lordships’ House backs strong, independent journalism.
Like the noble Lord, Lord Fox, I have concerns about the unmet need for collective action, which is a problem across all our digital regulation. Digital is a complex area of law, it is technical to prove wrongdoing and hard for a non-expert to know which law is being broken: data, consumer, harms, IP, privacy and so on. We did not get an adequate redress system in the Online Safety Act and we will undoubtedly discuss it  again during the passage of the DPDI Bill, so I ask the Minister whether he is open to discussing this in the round so that we can consider the need for the consumer to be supported across all the regimes. I am glad not to disappoint the noble Baroness, Lady Stowell, because at the same time I would like to revisit the idea of a standing Joint Committee on digital regulation to provide the parliamentary oversight of independent regulation which the pre-legislative committee suggested during the passage of the Online Safety Act.
Finally, I was going to mention the full merits appeal, but I thought the noble Lord, Lord Vaizey, spoke so beautifully on that, as did the noble Lord, Lord Lansley, and the noble Baroness, Lady Stowell, that I shall just associate myself with their words and say that I very much look forward to working with noble Lords across the House on the Bill and that I have learned a great deal during this debate.

Lord Mendoza: My Lords, it is a great joy to follow the outstanding words of the noble Baroness, Lady Kidron. I should declare that I am the chairman of Historic England and a member of the board of the Ashmolean Museum. Like everybody else, I support much of the intention of the Bill, but I shall confine myself narrowly to the topic that has been raised multiple times on the charities point by my noble friend Lord Vaizey.
I take my noble friend Lord Kamall’s point that perhaps not all charities operate their processes with the most benign of intentions, but I think we have to be careful about placing additional regulation on charities, which are already regulated by the Charity Commission. I want to talk about this in special relation to the heritage sector, because so many organisations in that sector use the annual subscription method to fund memberships—it is incredibly important. Looking at Clause 252, the noble and learned Lord, Lord Etherton, read out some of the definitions of what a subscription contract is, but it is clear that when charities sell such subscriptions and memberships they are providing goods and services. Sometimes it is free entry to places, sometimes it is parking, sometimes it is digital content or magazines, but they are supplying stuff.
They also look not unlike things that could be defined as subscription traps: they involve auto-renewal and people having to make a conscious effort to cancel, but they are an important part of the operating models of charities. For example—if I can add some colour— the noble Baroness, Lady Bennett of Manor Castle, mentioned her favourite charity, English Heritage. The English Heritage Trust was established just in 2016 under its new name and in its new incarnation as a subsidiary of Historic England. It is a charity, and it holds the licence to care for and look after the national heritage collection—our stuff, if you like: 400 sites, dozens of museums, 1 million objects, from Dover Castle up to Hadrian’s Wall and including Stonehenge. I looked at the accounts, and its revenue is £130 million a year. Of that, £48 million—almost 40%—is membership income. If you fiddle with that, it could be very significant. If it makes a surplus, it all goes back into the restoration, maintenance and improvement of the national heritage collection.
Many noble Lords have raised the issue of gift aid, and there is a threat to that. As we have heard, HMRC treats these kinds of subscriptions as donations. However, if there is a repayment option in a donation, it no longer qualifies for gift aid. Again, that is a really big number. For example, the National Trust’s revenue last year was £682 million, which is very significant. Of that, £276 million—again, about 40%—was memberships and, of that, £47 million related to gift aid, so it is a non- trivial part of the operating models of a lot of these heritage organisations. As my noble friend Lord Vaizey said, that applies to all sorts of others, such as Kew Gardens or my own museum, the Ashmolean.
I hope that we can find a way in Committee, subject to my noble friend Lord Kamall’s point, of either working on the definition of a subscription contract or, as the noble and learned Lord, Lord Etherton, said, adding charities to the “Excluded contracts” provisions in Clause 253 and Schedule 20. I hope my noble friend the Minister finds a way of coming back to us with an answer on this question, because it is so important to the operating model of so many heritage organisations, museums and theatres up and down the country. It is a non-trivial point.

Baroness Uddin: My Lords, it is an honour and a privilege to follow such distinguished speakers.
This digital era is regarded as a miracle century of advancement. The Covid lockdown fastened us all to Zoom, which connected us with not just our loved ones but the worlds of work and business. The large monopolies arrived at our e-doors expanding every conceivable service, including health and well-being, education and internet shopping, on a scale beyond any predicted forecast. In zillions of homes around the globe, a device became the best childminder for five minutes of peace. In turn, four and five year-olds became the best tutors for countless reluctant grandparents, who are now just as hooked on sharing every aspect of their thoughts and live events—including my 84 year-old mother. These online interactions raise many aspects of our consumer rights and protections: how do we regulate a global phenomenon that is in every environment that we occupy?
I do not possess the technical prowess or expertise of many other noble Lords, but I welcome the determination of this Bill to ensure scrutiny of the digital economy. My intervention is based on a desire to play my part in safeguarding consumer rights and protections. I suggest that the Government need to be ready for frequent reviews of this fast-evolving spectrum of platforms and businesses.
I acknowledge the immense contribution of the digital market revolution to our economy and simultaneously worry about its capacity to develop advanced weaponry, the power of which is playing out on our screens to devastating impact on human beings on the battlefield. It is imperative to set benchmarks and standards as well as codes of ethics in managing new digital products and services.
I have been enthralled by the potential of digital advancement for the public good, for example in advancing communication. There is no one better  than the noble Lord, Lord Holmes, to explain some of its aspects, but the advent of technology-assisted learning has empowered so many people with disabilities—including my son—especially children and the elder generation. Such examples are minutiae among the millions of applications constantly being developed.
Lately, I have immersed myself in a number of workstreams arising from my role as co-chair of the All-Party Parliamentary Group on the Metaverse and Web 3.0. I have actively engaged with stakeholders, including developers leading various aspects of technology development such as cybersecurity, digital currency, AI and workforce development. I will therefore use this Second Reading in particular to raise matters of consumer protection and to highlight the need for widening access and diversity among those leading digital market innovation, as we must take action to remedy the deficit in the education and skills of our workforce.
I express my gratitude to former Minister Paul Scully, who worked tirelessly with a number of us in this arena to reach out to businesses and organisations that are not often on the radar of this Government or any other. He is much respected for his championing of a diverse workforce. I also thank Mr Charley Coleman from the Library for meeting me very late last night.
The Government propose that the Digital Markets, Competition and Consumers Bill will compel dominant digital platforms to trade fairly with the wider industry and consumers. The proposed new regime is to be overseen and enforced by the Competition and Markets Authority’s Digital Markets Unit, which the legislation gives the ability to ensure that people and businesses, regardless of their size, are treated fairly by tech firms. I assume that the result will be lower prices for online services and goods, giving more informed choices and control to consumers, but as it is—the Committee stage will no doubt improve some of the Bill’s shortcomings and strengthen it—this is difficult to comprehend, given that Google, Apple, Meta, Amazon and Microsoft continue to dominate the profit ledgers and dwarf any control over advertisements and content.
It is self-evident that what consumers view and experience is determined by often unknown practitioners, who design the contents and messaging that we are allowed and forced to view. Given these confined parameters of product development and services, how will the regulator determine fairness, prices, quality or equity—never mind social justice and safeguarding consumers? What assessment have the Government made of the number of small, independent entrepreneurs and how they can be assisted to compete with the likes of controlled monopolies such as Google, Meta and Amazon, to maintain fair competition and choice for consumers?
Regardless, we know that the appetite and demand for online services and goods has soared. Reportedly, the numbers of adults shopping online have increased from 53% to 87% within a year. This has inevitably resulted in an increased level of concern from individuals and SMEs, many of which have experienced unsafe online interactions and digital trading. This suggests that consumer rights and protection are adversely ineffective.
Equally significant is the content of advertising and news materials on big platforms such as Google and Meta, which are impossible for SMEs to contest. Hence the question of balance is difficult to evaluate unless there is an adequate level of financial resources, capacity of expertise and strong representation of consumer advocates within the regulatory structures. Concerns have been raised by some organisations, including bilingual organisations. The Public Interest News Foundation said:
“shrouding all commercial agreements struck under the shadow of the new regulatory framework in secrecy will leave small, resource-strapped independent publishers at a disadvantage compared with their large, corporate counterparts. This would create yet another competitive imbalance in the legislation that is designed to remedy an anti-competitive market”.
How do the Government intend to ensure that the authority given to the CMA will guarantee consumer protection and transparency in its pursuit of unfair and anti-competitive advantages held by leading monopolised companies, as stated?
Not all the news is terrible; it is good that the UK remains a destination of choice for investors and, as the Minister himself said, we can boast holding Europe’s largest number of unicorns. In addition, more music to my ears is the exponential growth of start-up investing, which demonstrates confidence in the UK economy, with the expectation that it will drive economic growth with an additional £41 billion by 2025.
There has been huge excitement about the potential of AI technology, robotics, the metaverse and Web 3.0, all of which cannot function in a silo and require clarity from the Government and overall strategic planning that incorporates new components of digital markets and technological evolution. As the noble Lord, Lord Fox, reminded us, big techs have already encircled the AI envelopes. I agree with noble Lords that, if we get this right, the UK can indeed lead a holistic approach to a digital platform and economy, no matter who is in Government.
I take this opportunity to say something about the potential economic impact of the metaverse—and I am not referring to the one-man band of Meta and its proposed construction of an online world, including depicting history as it sees fit. Here lies the problem in regulating the market of new products and content; for example, who decides what content is appropriate for public consumption, such as on colonisation, slavery, the Elgin marbles, or within the wide range of services being developed in the metaverse space? If we abide by the current status quo, how will any regulator position itself vis-à-vis the many contentions—history is littered with biased information—when it is clear that alternative smaller platforms do not have the massive resources to create or challenge the current trajectory of opinions and content, which seems to be supported by a handful of individuals who control media outlets and governing institutions? As a collective, they set out a specific narrative on any given subject, even if that account is deemed inaccurate and false from others’ points of view—held by vast numbers of consumers, for instance. Thus, big techs with large pockets and capacity will continue to mark out profits of billions while ignoring the need for more conscious and inclusive content and services. My point is that I fear that few changes may happen as a result of this legislation to address the issue on perceived bias.
The hope on the horizon is the new transition to Web 3.0 and the metaverse, with promises of personal data ownership and control; PWC, Goldman Sachs and others suggest that the economic benefits will yield multiple billions to many economies around the world. In fact, our APPG, which I have co-chaired for the past 18 months, has undertaken some work, led by Professor Fernandes of Durham University, who has examined the economic impact of metaverse-related technology by regions, in line with the Government’s levelling-up agenda, particularly cites the east of England as the powerhouse positioned to support the development and research of the metaverse and Web 3.0 technology.
Here too we need to guard against anticompetitive structures and, while encouraging innovation, there is an urgent need to empower all parts of our regions with emerging prospects of jobs and training in this sector. The APPG on Metaverse and Web 3.0 programmes included several evidence sessions with women leaders in this sector, academics and young people. Many highlighted the disparities in access to high-quality equipment and internet connectivity, which were stark. There are many parts of our country where families and young people simply cannot afford the benefit and advantages which new technology enables.
Data ownership is therefore a promise from emerging Web 3.0 technology; it is my view that it is likely to remain a panacea and a purview of the elite organisations and institutions. The case in point is access to NHS health data. I am not sure what percentage of the public actually access their own personal data, but we know that huge amounts of data are already in circulation, bought and sold between companies and corporate organisations, owned and transferred many times over. What difference will this legislation make to that data ownership?
Choices and informed decision-making, whether about goods, services or sharing data online, must be in the forefront of any legislation which intends to promote innovation while protecting consumers, and there are significant gaps in achieving proper safeguards for our citizens in relation to protecting data within the NHS and the welfare system. Informed consent must be an absolute priority, and in the event of any breaches of consumer trust, every user must have a clear pathway for seeking information, appealing decisions and, in the event of any negligence, reparation should be embedded.
Embedding consumer protection, structured penalties and redress within the digital economic landscape would instil community confidence that consumer rights are indeed the Government’s uppermost priority. The Bill must shift the power balance in favour of our citizens as consumers. Only then can this new frontier of the digital market provide absolute certainty of consumer protection.

Lord Sandhurst: My Lords, I welcome the aspiration of this Bill, in particular its stated intent to
“make provision relating to the protection of consumer rights and to confer further such rights; and for connected purposes”.
The focus of my speech today is narrow. It is addressed at only one topic and one clause, namely Clause 126. After Second Reading, it is my intention  to move an amendment which goes further than the provisions of that clause, and I have given notice of that to the Government. This is about achieving effective access to the courts, which is of real importance to consumers and businesses, who have to fight large entities to recover just compensation. Let me explain.
As the Explanatory Notes tell us, Clause 126 was introduced by the Secretary of State to overturn with retrospective effect a decision of the Supreme Court handed down on 26 July of this year in cartel litigation known colloquially as PACCAR. The effect of the Supreme Court’s decision is to render unenforceable third-party litigation funding agreements, which I shall refer to hereafter as LFAs. Clause 126 makes a start at putting this right, but it should and could go further, which is what my amendment will be aimed at. The Supreme Court rendered unenforceable these third-party litigation funding agreements, which are entered into by claimants with third-party funders who finance litigation in return for the right to recover payment, often set as a percentage of the damages recovered. Such third-party funders have no say in the litigation and are ring-fenced from tainting its management. The lawyers are paid, win or lose, by the funder, and so can take a detached view when advising their clients.
Contrary to the views of most who practise in this area, and indeed the view of the Competition Appeal Tribunal—CAT—and later the Divisional Court, the Supreme Court in PACCAR held that if an LFA is to be enforceable by the funder, it must comply with the Damages-Based Agreements Regulations 2013. These regulations were introduced to regulate contingent fee agreements between claimants and their lawyers providing litigation services, not funding arrangements with third-party funders.
Unfortunately, it is quite clear now that almost all, if not all, current LFAs do not comply with the regulations. So, they are, and will be, unenforceable unless something is done about it. That is because the funders, and indeed most lawyers, considered that simply to provide funding was not to provide claims management services and did not bring them within the regulations. The Supreme Court, however, determined otherwise—for reasons I need not explain but would not challenge. That has serious ramifications for existing and future claims. The 2013 regulations were not drafted with LFAs in mind; lawyers were the target, not funders. So, it is hard, if not impossible, I am told, to structure compliant LFAs for use between a funder and client. This Bill offers an excellent opportunity to put things right, but so far it does not go anything like far enough.
Correction is necessary because an essential element, as we all know, of encouraging competition and a free market is to ensure that consumers, SMEs and other businesses have effective means to challenge and obtain redress from cartels and others that abuse dominant positions. That requires effective access to justice, particularly, but not always, in the CAT. Indeed, on 3 November 2014, the then Parliamentary Under-Secretary of State, my noble friend Lady Neville-Rolfe, said in this House in Committee on the Consumer Rights Bill something that demonstrates that the Government favoured LFAs over damages-based agreements. She said that
“there is a need for claimants to have the option of accessing third-party funding so as to allow those who do not have a large reserve of funds or those who cannot persuade a law firm to act pro bono to be able to bring a collective action case in order to ensure redress for consumers. Blocking access to such funding would result in a collective actions regime that is less effective”.
She added:
“Restricting finance could also create a regime which was only accessible to large businesses. This would weaken private enforcement in competition law, which is of course not the Government’s wish or intention”.—[Official Report, 3/11/14; col. GC583.]
That was what was said in 2014, and that is what is clearly stated in the Long Title to this Bill. The Government supported the use of such litigation funding agreements in the sort of litigation that we are concerned with in this Bill.
Competition law cases such as Mastercard or the claims against Google are obvious examples. The group actions in such cases are plainly necessary if consumers are to have effective access to justice and giant organisations are to be made to behave themselves. But group actions also have to be brought in the High Court, not just in the CAT. They have to be brought in respect of matters in the High Court which do not meet the criteria for an action in the CAT. These are necessary for individuals to obtain redress where a powerful entity has caused damage to those who, again, cannot individually contemplate litigation. A claim against a car company cheating on diesel emissions is a classic example, but it need not be the only example. Claimants’ rights as consumers are plainly involved. Group litigation is their only practical means and they have to be funded by third-party funders.
Bringing this speech to a conclusion: the key issue is that the Supreme Court’s PACCAR ruling affects LFAs in all courts, not just in the CAT, and not just, as this Clause 126 is designed to address, in so-called opt-out cases. You need it for opt-in cases as well.
In fact, such funded cases throughout the court system, particularly in the High Court, make up the majority of cases that litigation funding supports. I am told that CAT cases are just the tip of the iceberg. While the current Clause 126 goes a little way, it will put matters right for so-called opt-out cases, but will not help in opt-in cases, nor in conventional bi-party litigation—one large against one small. The small company fighting Apple will, effectively, not be able to go to a funder. Worse still, in the High Court—outside the CAT—in, for example, drug damages litigation, or the diesel exhaust emissions litigation to which I referred, the current Clause 126 will achieve nothing. Claimants will have no effective access to litigation funding agreements and many cases already in the pipeline face considerable problems.
It is necessary, therefore, to restore what I would say was the Government’s original 2013-14 intention, which was for litigation funding agreements not to be subject to the damages-based agreement regulations.
Clause 126 needs to be redrafted and expanded or it will not meet these important issues. This is critical to provide certainty and effective access to justice, and to protect and expand consumer rights: the Bill’s stated aim. I have provided a draft to the Minister and will be happy to engage with him and his team.

Lord Vaux of Harrowden: My Lords, it is always good to be able to start a speech with the words, “This is a good Bill”. I am not the only person to have used those words. They have been used all around the Chamber; it is an unusual situation and very welcome. It is also getting to the point of the evening where it is quite difficult to say anything that has not been said several times before. I am going to try to avoid repeating what has been said. I may not manage that, partly because, as the Minister will have spotted, there is a high-level of consistency of theme emerging on all sides of the Chamber.
The various ways in which the large tech platforms can stifle competition have been well described by many noble Lords, including the Minister at the outset. Part 1 of the Bill empowers the Digital Markets Unit of the CMA to tackle the monopolistic behaviour of companies with strategic market status with a quicker, more flexible, tailored approach and a more efficient regime. It should make it easier for new, innovative companies to enter the market on a fair basis—so far, so excellent. It is a shame, then, that the Government have chosen to amend their own Bill in ways that may water down the effectiveness of Part 1. This has been alluded to by noble Lords all around the Chamber and I am sure that we will have a lot of discussions on those matters as the Bill progresses through its stages—but I will very quickly touch on the matters that worry me most.
First, it seems entirely wrong, and to conflict badly with the CMA’s independence, that any guidance issued by the CMA regarding the exercise of its functions relating to digital markets must first be approved by the Secretary of State. Worse, there is no timeframe or process for obtaining such approval; I think that is inappropriate. I can see a case for a defined period of consultation, but approval goes too far. Why did the Government decide that was required?
Secondly, again as we have heard several times, the Government have potentially weakened the ability of the DMU and CMA to implement and enforce rulings quickly by introducing a countervailing benefits exemption, proportionality restrictions and watering down the judicial review appeal process. The danger here is that these, individually or together, may provide an anti-competitive SMS entity with more ways to bog down the process in appeals and so delay implementation of any enforcement. In such a fast-moving market, speed and agility are critical; anything that delays the enforcement of a ruling could be the difference between a new entrant’s success or failure. We are talking about some of the world’s biggest companies here, with extremely deep legal pockets.
Part 4 of the Bill, which covers consumer protections, introduces some really welcome additions to consumer protection law, especially around subscription contracts. But they do not go far enough and there are some important omissions in what the Government have proposed. Others have pointed out the omission from the Bill of fake reviews. This is an important area and I look forward to hearing from the Minister what the Government are planning—I know they are consulting, but I would like to understand what they are planning on doing in respect of fake reviews.
The other area that the Bill does not tackle is the more difficult question of drip pricing. This is perhaps a more nuanced area. There are genuine benefits to consumers from disaggregating pricing of core and non-essential elements of a service, such as an airline ticket: those who are prepared to travel without an assigned seat, with no luggage and so on, clearly benefit, but that is different for a parent and child, for example, for whom sitting together is essential. Having said that, I can think of a number of occasions when I would have paid good money to sit at the other end of the aeroplane from my children. I hope Ryanair is not listening; that might give it ideas.
There are those companies that push drip pricing too far by hiding unavoidable charges, fees for essential elements, commissions and so on until the very end of the process. That is clearly unacceptable. A well-known train booking company does this, as do event ticket sellers: you get to the end of the process, you are bought into going to see that particular concert, it is too late to turn around, and suddenly they hit you with all the fees and whatever at the end. It is time that real action is taken to ensure fairness and transparency, and this Bill seems the ideal opportunity for that.
On subscription traps, the Bill introduces some welcome changes that will help consumers, but I do not think they go far enough. That said, I have some issues with the cooling-off period; I am not sure that is necessarily the best way of doing it. As a point of principle, it cannot be right for businesses to make their money by deliberately designing subscription arrangements that rely on forgetfulness or making it difficult to cancel. For subscriptions that involve a free or reduced period up front, the contract should end by default unless it is actively renewed at the end of that initial period. It is too easy at the moment to join a free trial and then find yourself locked in because you forget to cancel on the due date. That will probably remain true even with the reminders the Bill will introduce.
It is often too difficult to find the end date of a subscription. For example, I have been looking at my home broadband contract recently. I ended up having to ring the company because I could not find the end date anywhere in any of the account details. The Bill will require a reminder as the end date nears, which is welcome, but it is often helpful to be able to find the date well in advance—for example, as in the case of my broadband, when a new and better service becomes available and you want to know when you will be able to transfer. Why not insist that the end date is included clearly on every invoice or other piece of correspondence? That would not add any great burden—companies seem to be able to do it easily enough if they are pushing you to upgrade—but it would make it a lot easier for the consumer to find out, at any time, when the contract will terminate.
Another pernicious trend seems to be emerging, especially among telecom providers, for longer, two-year contracts. That may be fine, but there is often a very small print price kicker, where periodically, often on a fixed date such as 31 March, the price rises by significantly more than inflation. That can happen within a short period of entering the contract—for example, if you sign up in March you can be hit by that price kicker  within a couple of weeks of signing the contract. These price hikes are often hidden with an asterisk and a footnote in small print. I looked at my provider this morning. Down at the very bottom of the page it says, “Legal stuff”. In there, there is a sentence that says it will go up by 3.9% over inflation on 31 March. That is not acceptable.
Finally on subscriptions, it cannot be right that companies should be able to continue to take subscriptions for services that are clearly not being used after the initial period has come to an end. I suggest that, if a service has not been used for three months after the initial contract period has ended, it should be terminated automatically, unless the subscriber actively confirms that it should continue. It is not acceptable to rely on the fact that the subscriber has forgotten and said nothing if there is no use of the service.
At the risk of being predictable, I will put in a word on fraud, which I do not suppose will surprise anybody. One of the biggest risks that consumers face at the moment is online and digital scams. The majority of these arise from the telecoms industry or the online services industry, particularly where scammers use these organisations’ services to make contact and create the scam. This is a missed opportunity in the Bill, and I hope it is one we will come back to.
Overall, this is a good Bill, but there are areas where we can improve it. I look forward to working with everyone to do so.

Baroness Harding of Winscombe: My Lords, it is a privilege to follow the noble Lord, Lord Vaux, and his really detailed and insightful analysis of my old industry—telecoms—among other things. I am sure my noble friend the Minister will be pleased that I rise, as the last Back-Bench speaker, to support the Bill.
I should declare my interest. I am never quite sure when I should and should not declare my relationship with my husband in the other place, but as he was so fully quoted in the Lords briefing, I feel I should reference that my husband tends to lead on competition issues in our family and I lead on digital things, so this Bill brings us together.
I strongly support the Bill. As many noble Lords have said, it has the potential to really drive innovation and investment, and to bring immediate consumer benefits. We should all warmly support it. I am also pleased to see it finally here.
I will speak primarily and very briefly on Part 1 and the competition elements. Large companies the world over try to persuade us that investment and competition are a trade-off. Time and again we have seen that that is not the case. I come to this with experience of running a challenger telco in an ex ante competition regime. Large incumbents rarely create real innovation. They spend a huge amount of money on it, and they are very proud of telling us how much they spend, but big leaps of innovation rarely come from the incumbents. That is the first thing that is true of nearly all these markets.
The second is that they spend even more money protecting their oligopoly or monopoly. I think it was Niklas Zennström, one of the founders of Skype, who  originally said something like, “The thing about monopolies is that they’re like children. If you don’t have any you don’t really understand what the fuss is all about, but once you have one you will do everything in your power to protect them”. We should have no illusions: that is what big tech is doing during the passage of this Bill. It is not wicked and evil; it is entirely rational. If you have an oligopoly or a monopoly, you will protect it to the end.
Digital is no different from every other market where these forces are at play. We have exactly these two forces. Innovation is not coming from the incumbents. OpenAI is not an incumbent. Many noble Lords referenced Google, the original innovator, against the incumbent, Microsoft. We should not allow ourselves to be deceived by the big sums of money that incumbents spend on innovation to believe that the digital innovation will come from them. Equally, we should recognise how much power they will bring to bear to try to protect their existing monopolies. The noble Lords, Lord Fox and Lord Knight, gave such erudite descriptions of the theory and practice of what is happening that I will not repeat them, except to say that it is a pleasure to be back working with them together, as we all did on the Online Safety Act.
Digital is different, though, in a couple of ways. First, it tends to network monopolies in an extraordinary way, partly because the companies in it that succeed make so much money. The leveraging principle is alive and well as they acquire every little start-up around them to leverage the monopoly they already have. The second thing that is very different from other markets with network monopolies is the speed at which these things happen. The third is how interconnected and complex the digital architecture is.
All this means that it is really important that we understand how the package of measures in this Bill will work. We will have to descend into the fine, technical detail if we are to ensure we really do balance these forces that are against real innovation and real competition. As my noble friend Lady Stowell said, I feel that the Government got the balance right in the original Bill—that was the Goldilocks spot. I am sad that virtually every speaker has said the same thing: that we have moved slightly off the Goldilocks spot, and that every one of the changes brought in on Report in the other place moved the Bill towards the power of big tech and made it just a little harder for the regulator to do its job.
I fear I will list the same concerns as many other noble Lords: the full merits appeal, the move for fines, the Secretary of State’s approval of all guidance, the removal of “indispensable” from Clause 29(2)(c), the leveraging principles, the benefits for consumers, the wording in Clause 19, and the lack of third-party consultation rights, which means that the little guy does not get a fair shout in a JR process. We will have to look at all those in considerable detail as we go through Committee.
I shall briefly speak on the first one, the full merits appeal for fines. I have run a little business in a full judicial review world, in a judicial review-plus world, and in a full merits world. In fact, I had a great row with my regulatory director at TalkTalk when Ofcom was consulting on moving away from full merits to  the JR standard. The regulatory team at TalkTalk thought that it might win a full merits appeal, because it had in the past won one in five years, so it did not like the idea of giving that up. My chairman at the time and I had to overrule them and say, “We might be able to fight one of those battles in the next five years, but BT will fight every single one—maybe 20 a year. Our pockets aren’t deep enough; we just don’t have the money”.
It is hugely tempting to believe that you will get to a better answer by full merits, but I fear my experience is that you do not. You tie everything up, so whoever benefits from things going slowly wins, whoever has the deepest pockets wins, and whoever is willing to take the risk to keep appealing again and again wins. That shifts the regulator’s risk appetite, because it does not have unlimited pockets, it does not have unlimited time and it cannot afford to keep losing. That means that the decisions it takes and the actions it chooses even to begin are reduced, simply because of the scale of the appeals risk. I really do not understand why tech companies, alone among network monopoly owners, are at risk of having their fines calculated incorrectly, in comparison with telcos, water companies and electricity businesses, all of which live in an ex ante regulatory regime with a JR standard for fines. I would be really keen to understand why we think tech exceptionalism needs to be added back into the Bill.
I am conscious of the time and will not take much longer. I pull us right back to look at the competition elements of the Bill in the round, because they are really important. There is a temptation this evening, for the small number of us who appear for all these debates on digital: as the noble Baroness, Lady Kidron, again said so eloquently, the danger is that people do not realise how important this is. This Bill could be every bit as important as the original anti-trust legislation in the US as the 19th century turned into the 20th. It is that important that we get this right.
I think we are quite well suited to going through the detail. Rather than ask my noble friend to respond on specifics today, I just ask him to reassure us that he will enter Committee in the same spirit in which many of us worked together on the Online Safety Act: recognising that we are trying to find that Goldilocks spot, and that this will require us to understand not just each individual issue but how the issues interrelate. The danger is that the pressures on large tech companies to influence and weaken the regime will enable them to play the game against us rather too well. They just chip away on one or two issues and, before you know it, you do not have a landmark piece of competition regulation; you have something that none of us can remember from the 19th century, when monopolists were doing rather well, before anti-trust legislation came in.
That is why I think this really matters, and very briefly I just add my words to the concerns about the subscription clauses. As the noble Lord, Lord Vaux, said, it is important that we protect consumers in this space. It looks like we have got something wrong on gift aid, judging by the number of people who have been emailing all of us. I think we have also got something wrong in the way that app developers work with the app stores. The app stores control subscriptions, and  there is a real risk that once again we are putting the responsibility on the app developers, not recognising that the consumer needs to be able to cancel the actual subscription that Apple controls. We will need to look at those in considerable detail, otherwise we will have all these brilliant intentions but the legislation will not deliver what people need.

Lord Clement-Jones: My Lords, it is a great pleasure, as it always seemed to be on the then Online Safety Bill, to follow the noble Baroness, Lady Harding, especially with her great advocacy of the power of competition. That passionate belief in competition is something that unites us all around the House today. First, I declare an interest as a consultant to DLA Piper and as chair of the Trust Alliance Group, which runs the Energy Ombudsman service.
I thank the Minister—the noble Lord, Lord Offord—for what I thought was a comprehensive introduction that really set the scene for the Bill. As my noble friend said, we very much welcome the Bill, broadly. It is an overdue offspring of the Furman review and, along with so many noble Lords around the House, he gave very cogent reasons, given the dominance that big tech has and the inadequate powers that our competition regulators have had to tackle them. It is absolutely clear around the House that there is great appetite for improving the Bill. I have knocked around this House for a few years, and I have never heard such a measure of agreement at Second Reading.
We seem to have repeated ourselves, but I say to the noble Lord, Lord Vaux, that repetition is good. I am sure that in the Minister’s notebook he just has a list saying “agree, agree, agree” as we have gone through the Bill. I very much hope that he will follow the example that both he and the noble Lord, Lord Parkinson, demonstrated on the then Online Safety Bill—as the noble Baronesses, Lady Kidron and Lady Harding, said—and will engage across and around the Chamber with all those intervening today, so that we really can improve the Bill.
It was very important that the noble Baroness, Lady Stowell, reminded us that it is not just size that matters: we must consider behaviour, dominance, market failure and market power. We need to hold on to that. We need new, flexible pro-competition powers and the ability to act ex ante and on an interim basis—those are crucial powers for the CMA. As we have heard from all round the House, the digital landscape, whether it is app stores, cloud services or more, is dominated by the power of certain big tech companies, particularly in AI, with massive expenditure on compute power, advanced semiconductors, large datasets and the scarce technology skills forming a major barrier to entry where the development of generative AI is concerned. As the noble Lord, Lord Knight, indicated, we can already see the future coming towards us.
In that context, I very much welcome Ofcom’s decision to refer the hyperscalers in cloud services for an investigation by the CMA. The CMA and the DMU have the capability to deliver the Bill’s aims. We were reminded by the noble Lords, Lord Tyrie and Lord Lansley, about the importance of the ability to  implement the new legislative powers. Unlike some other commentators, we believe, as my noble friend said, that the CMA played a positively useful role in the Activision Blizzard-Microsoft merger. As a number of noble Lords, including the noble Lords, Lord Holmes, Lord Kamall and Lord Tyrie, and the noble Baroness, Lady Stowell, emphasised, it is crucial that the CMA needs to be independent of government. All around the House, there was comment about the new powers of the Secretary of State in terms of guidance. The accountability to Parliament will also be crucial, and that was again a theme that came forward. We heard about the Joint Committee proposals made by both the committee of the noble Baroness, Lady Stowell, and the Joint Committee on the Online Safety Bill.
We need to ensure that that scrutiny is there and, as the Communications and Digital Committee also said, that the CMA’s DMU is well resourced and communicates its priorities, work programmes and decisions regularly to external stakeholders and Parliament.
The common theme across this debate—to mention individual noble Lords, I would have to mention almost every speaker—has been that the Bill must not be watered down. In many ways, that means going back to the original form of the Bill before it hit Report in the Commons. We certainly very much support that approach, whether it is to do with the merits approach to penalties, the explicit introduction of proportionality or the question of deleting the indispensability test in the countervailing benefits provisions. We believe that, quite apart from coming back on the amendments from Report, the Bill could be further strengthened in a number of respects.
In the light of the recent Open Markets Institute report, we should be asking whether we are going far enough in limiting the power of big tech. In particular, as regards the countervailing benefits exemption, as my noble friend said, using the argument of countervailing benefits—even if we went back to the definition from Report—must not be used by big tech as a major loophole to avoid regulatory action. It is clear that many noble Lords believe, especially in the light of those amendments, that the current countervailing benefits exemption provides SMS firms with too much room to evade conduct requirements.
The key thing that unites us is the fact that, even though we must act in consumers’ interests, this is not about short-term consumer welfare but longer-term consumers’ interests; a number of noble Lords from across the House have made that really important distinction.
We believe that there should be pre-notification if a platform intends to rely on this exemption. The scope of the exemption should also be significantly curtailed to prevent its abuse, in particular by providing an exhaustive list of the types of countervailing benefits that SMS firms are able to claim. We would go further in limiting the way in which the exemption operates.
On strategic market status, one of the main strengths of the Bill is its flexible approach. However, the current five-year period does not account for dynamic digital markets that will not have evidence of the position in the market in five years’ time. We believe that the Bill should be amended so that substantial and entrenched  market power is mainly based on past data rather than a forward-looking assessment, and that the latter is restricted to a two-year assessment period. The consultation aspect of this was also raised; there should be much greater rights on the consultation of businesses that are not of strategic market status under the Bill.
A number of noble Lords recognised the need for speed. It is not just a question of making sure that the CMA has the necessary powers; it must be able to move quickly. We believe that the CMA should be given the legal power to secure injunctions under the High Court timetable, enabling it to stop anti-competitive activities in days. This would be in addition to the CMA’s current powers.
We have heard from across the House, including from the noble Viscount, Lord Colville, about the final offer mechanism affecting the news media. We believe that a straightforward levy on big tech platforms, redistributed to smaller journalism enterprises, would be a far more equitable approach. However, as a number of noble Lords have mentioned, we need to consider in the context of the Bill the adoption by the CMA of the equivalent to Ofcom’s duty in the Communications Act 2003
“to further the interests of citizens”,
so that it must consider the importance of an informed democracy and a plural media when considering its remedies.
As my noble friend and many other noble Lords said—including the noble Baroness, Lady Bennett, the noble Viscount, Lord Colville, and the noble Lords, Lord Lansley and Lord Black—the Bill needs to make it clear that platforms need to pay properly and fairly for content, on benchmarked terms and with reference to value for end-users. Indeed, we believe that they must seek permission for the content that they use. As we heard from a number of noble Lords, that is becoming particularly important as regards the large language models currently being developed.
We also believe it is crucial that smaller publishers are not frozen out or left with small change while the highly profitable large publishers scoop the pool. I hope that we will deal with the Daily Telegraph ownership question and the mergers regime in the Enterprise Act as we go forward into Committee, to make sure that the accumulation of social media platforms is assessed beyond the purely economic perspective. The Enterprise Act powers should be updated to allow the Secretary of State to issue a public interest notice seeking Ofcom’s advice on digital media mergers, as well as newspapers, and at the lower thresholds proposed by this Bill.
There were a number of questions related to leveraging. We want to make sure that we have the right approach to that. The Bill does not seem to be drafted properly in allowing the CMA to prevent SMS firms using their dominance in designated activities to increase their power in non-designated activities. We want to kick the tyres on that.
Of course, there are a great many consumer protection issues here, which a number of noble Lords raised. They include fake reviews and the need for collective action, as was mentioned by the noble and learned Lord, Lord Etherton, and the noble Lord, Lord Sandhurst. It is important that we allow collective action not just on competition rights but further, through consumer  claims, data abuse claims and so on. We should cap the costs for claimants in the Competition Appeal Tribunal. I heard what the noble Lord, Lord Sandhurst, had to say on LFAs, which is highly relevant as well. These issues also include misleading packaging.
Nearly every speaker mentioned subscriptions. I do not think that I need to point out to the Minister the sheer unanimity on this issue. We need to get this right because there is clearly support across the House for making sure that we get the provisions right while protecting the income of charities.
There is a whole host of other issues that we will no doubt discuss in Committee: mid-contract price rises, drip pricing, ticket touting, online scams and reforming ADR. We want to see this Bill and the new competition and consumer powers make a real difference. However, we believe that we can do this only with some key changes being made to the Bill, which are clearly common ground between us all, as we have debated the Bill today. We look forward to the Committee proceedings next year—I can say that now—which will, I hope, be very productive, if both Ministers will it so.

Baroness Jones of Whitchurch: My Lords, we have had an excellent debate, with enormous expertise and some powerful themes emerging from around the Chamber. I look forward to exploring them in more detail when we roll up our sleeves and focus on the specifics in Committee. However, it is already clear that we start from a common belief that the essence of the Bill is important and necessary.
I will not repeat the points well made by my noble friend Lord Bassam about the history of delays and distraction. We could have had this Bill on the statute book much sooner, but we have to deal with the reality of where we are now. As noble Lords have said, the digital world is developing and expanding at an incredible pace and the dominance of the major players continues to rise. As a result, consumers and businesses feel increasingly powerless in the online market. The Bill has an important role to play in resetting the balance, so that we can concentrate on the undoubted benefits that can accrue from greater innovation, access and competition in the sector.
Of course, we still have an important role to play in scrutinising the Bill, but our job has been made so much more difficult by the last-minute amendments tabled by the Government. I share the concerns that many noble Lords have raised during the debate; the warm glow of agreement identified by the noble Baroness, Lady Kidron, has united us, but not in quite the way that the ministerial team hoped. There are considerable concerns about the latest amendments tabled.
Evidence was given during Committee in the Commons from a wide range of stakeholders. They seemed broadly happy with the basic architecture of the procedures, conduct requirements and appeals systems set out in the original Bill. The main concern raised, if there was one, was the length of time it would take to complete the designation of strategic market status, including appeals. I listened carefully to the attempt of the noble Lord, Lord Offord, to provide reassurance on the changes but, like many noble Lords, I was not convinced as to why the Government felt they were really necessary.
For example, we share the concern of a number of noble Lords about the late amendment to switch appeals against CMA penalty decisions from a judicial review to a merits-based system. This is widely perceived as an attempt to water down the Bill, which opens the door to lengthy wrangling and long delays in finally resolving issues. This goes against the overriding desire for these cases to be heard and resolved in a timely manner.
When asked about this issue in the Commons Committee hearing back in June, the CEO of the CMA made it clear that the authority wanted the JR standard to be applied to its decisions at appeal. She said:
“It is critical that the CMA faces effective judicial scrutiny for our work. That should go on the record. We think that the JR standard achieves that”.
She went on to say that her experience of merits appeals was that they result “in very protracted litigation”, making it
“a lot harder to reach constructive, collaborative outcomes”
because
“all eyes are on that litigation process”.—[Official Report, Commons, Digital Markets, Competition and Consumers Bill Committee, 13/06/23; cols. 7-8.]
We agree with this analysis and, like many noble Lords, I will want to explore further in Committee why the Government felt that this change was necessary.
We also share noble Lords’ concerns about the watering down of the powers of the CMA through the countervailing benefits exemption, which would allow SMS-designated firms to argue that the benefits of their market domination outweigh the damage. This has been further weakened by the deliberate fudging of the definitions of consumer benefit. Similarly, the Government’s late amendment requiring the CMA to apply a proportionality test on conduct requirements gives a whole new raft of legal loopholes, which will no doubt, as we have heard in the debate, be exploited mercilessly by the vast legal companies employed to protect the big tech firms.
We do not believe that these new amendments are necessary. They will drag down the work of the CMA, undermine its independence and tie it up in endless court battles. We want to return to all these issues in Committee.
In the Commons, our Front Bench also tabled an important amendment to improve the consultation rights of challenger firms when the CMA is investigating the strategic market status of big tech firms. As we know, challenger firms are those that are being squeezed out of the market by the anti-competitive actions of those that currently dominate the market. We have heard numerous examples of these behaviours, such as restrictions on booksellers’ access to Amazon listings, the prohibitively high charges for apps developers to appear on Apple products and the domination of Google searches by those prepared to pay for the space. The challenger firms deserve the right to be formally consulted when a CMA investigation is taking place and to give evidence in any subsequent hearings. I hope we can work with the Government to be assured that these protections will be in place.
A great many noble Lords have eloquently expressed the need for greater protection for intellectual property and content creators, which needs to be at the heart of the Bill. It is crucial that we use the Bill to defend our  news media, whose content is routinely absorbed by digital platforms without compensation.
Noble Lords made a powerful case for tackling platforms that take advertising revenue without investing in the original content. Similarly, artists, publishers and broadcasters need to be paid properly and fairly. We believe that an interest of citizens duty could widen the remedies available in the arbitration process and open the door to collective actions on cases such as this. We also want to ensure that the total value of repeat visits to online sites is properly captured. This is hugely important for the health of our creative economy and our access to informed journalism. We want to work with the Government and colleagues to get this regime right, and we want to explore my noble friend Lord Knight’s point about who owns our personal data and whether we can get it back once it has been published. We very much support the argument of the noble Lord, Lord Holmes, and the noble Baroness, Lady Uddin, that it is essential that accessibility is designed into all online platforms.
I am pleased that the noble and learned Lord, Lord Etherton, raised the need to reform alternative dispute resolution and the right of redress. We welcome the strengthening of ADR provisions, but we believe that it could have gone further. ADR has the capacity to be a simple, low-cost way of consumers raising complaints, and having an independent ruling by an ombudsman and a speedy form of redress. Unfortunately, the ADR landscape continues to be muddled and confused, with multiple providers, lack of clear signposting and refusenik companies that will not participate in the schemes. We believe that there is a strong case for single, mandatory ADR providers to operate in each sector, and we want to explore how this can be achieved in Committee.
The noble Baroness, Lady Hayman, will be pleased to hear that we also wish to explore whether the right to redress should include the right to repair for electronic equipment, with spare parts easily available, as happens in many other jurisdictions.
A number of specific consumer rights issues were tabled in the Commons to which we will want to return. First, subscription traps have been raised by many noble Lords and we do not feel that the current wording in the Bill goes far enough. This is a widespread problem, with Citizens Advice estimating that some £300 million a year is spent on unwanted subscriptions, often by those who can least afford them and with limited digital skills. While we were all tempted by the suggestion of the noble Viscount, Lord Colville, of a “terminate now” button, having listened to the debate, I have realised how much more complicated this is. Until now, we have argued for the provision to opt into, rather than opt out of, renewals. There is still a lot to be said for that principle, but we also need to recognise, as we heard today, that this cannot be a one-size-fits-all regime. Charity subscriptions and Gift Aid are some examples and noble Lords have made powerful cases for others.
Secondly, one of the most pernicious anti-competitive activities in the digital marketplace is fake reviews. They are damaging to huge numbers of legitimate businesses in the UK, big and small. The Government  have made the commitment to deal with hosting fake reviews at a later date, via Schedule 18. We do not believe that it is necessary to wait for action on this issue and we will be tabling amendments to go into the Bill.
Thirdly and similarly, the Government have recognised that drip pricing is an issue but have not explicitly included it as a banned practice in the Bill. Drip pricing is where consumers are tempted into an online purchase by low advertised prices, only to find that the final price they have to pay is hugely inflated. We have all fallen victim to this, with some notable sinners such as the airline industry, which daily seems to find new and novel ways to increase total ticket prices. The CMA reported that enforcement against drip pricing is restricted by a lack of an explicit ban, so we want to address this in the Bill.
Fourthly, I pay tribute to the work of my Commons colleague, Sharon Hodgson, on ticket touting in the primary and secondary online markets. It is proving more and more difficult to pay the standard advertised price for sport, concert and festival tickets. The current legislation on this is not proving fit for purpose. We need stronger laws to tackle illegal ticket resale. The CMA gave evidence that, when it tried to take Viagogo to court, it came up with inherent weaknesses in the existing consumer protection toolkit. We will want to address this in Committee.
Finally, the noble Baroness, Lady Bennett, and my noble friend Lady Ritchie will be pleased to hear that we want to address the increasing propensity of firms to make extravagant claims about their environmental credentials through greenwashing. We will want to explore a specific prohibition in Schedule 19 on claims about environmental benefits or sustainable products which are not based on evidence. We will also want to explore whether consumers misled on this basis could have the right of redress for goods and services which knowingly do not meet the suppliers’ claims.
I am aware that I have not been able to cover all the issues, and I do not want to test the patience of the House any further. As we have heard, many of these issues have cross-party support, and we hope the Government might favour our proposals, as we believe they will improve the Bill. We want to get the Bill on to the statute book as soon as practical, as it is long overdue. With this in mind, I underscore to the Government that any further attempts to water down the Bill will be met with huge resistance, so I hope the Minister can confirm that the Government have no further plans to do this. I look forward to his response.

Viscount Camrose: My Lords, I thank all today’s speakers for their eloquent, clear and powerful contributions to what has been a fascinating debate of the very highest quality. In particular, a number of speakers referred back to the Online Safety Act debates and variants of the warm glow. I am delighted to participate in any such approach to the Bill, as is my noble friend Lord Offord. I welcome very much the support shown across the House for this legislation, with the caveats gone into by many speakers. As my noble friend said in his opening speech, this is an important Bill which will drive innovation, grow the economy and deliver better outcomes for consumers.  The debate we have engaged in is demonstrative of noble Lords’ desire to ensure that digital markets are competitive and work well, and that consumers are protected from the potential harms posed by anti-competitive and unscrupulous practices.
I will respond to the questions raised, cutting across a number of issues and speakers as I go. First, my noble friend Lady Stowell and the noble Lords, Lord Bassam and Lord Clement-Jones, asked, quite rightly, whether we are watering down the Bill. Let me categorically say that that is absolutely not the intention. The amendments at Commons Report brought further clarity, and they will ensure that the DMU’s interventions are proportionate and drive the best possible outcome for consumers. I look forward to discussing this further during the Bill’s passage.
I turn to the appeals standard in the digital markets regime, which was raised by noble Lords across the House, including my noble friends Lord Vaizey, Lord Kamall, Lady Stowell, Lady Harding, Lord Black and Lord Lansley, the noble Lords, Lord Bassam and Lord Clement-Jones, and the noble Baronesses, Lady Kidron, Lady Ritchie and Lady Jones. We have considered strong and differing views about appeals from a range of stakeholders. Judicial review remains the appropriate standard for the majority of decisions in the regime, and we have maintained that for appeals of regulatory decisions, with additional clarification on the need for the Digital Markets Unit to act proportionately. Firms would already have been able to challenge decisions to impose interventions on the basis that there were disproportionate interferences with their rights under the European Convention on Human Rights. This amendment allows that challenge to happen under usual JR principles. Moving appeals on penalties to full merits brings the regime into line with the Enterprise Act 2002. It will mean that, once a breach has been found, a firm could argue that the imposition of a penalty was not appropriate, the level of it was not suitable, or the date by which it should be paid needs to be changed.
I turn to the countervailing benefits exemption, which was raised by a number of noble Lords, including my noble friends Lady Harding, Lord Vaizey, Lord Lansley, Lord Kamall, Lord Black, Lady Stowell, the noble Lords, Lord Bassam, Lord Clement-Jones and Lord Fox, the noble Viscount, Lord Colville, and the noble Baronesses, Lady Ritchie and Lady Kidron—I see the point about themes. I reassure all noble Lords that this is a further safeguard in the legislation to ensure that consumer benefits which might have been unknown when conduct requirements were first introduced can be recognised. The noble Lord, Lord Bassam, asked for an example of how this could work in practice. If an SMS firm bans an application on its platform, it might breach a conduct requirement not to apply discriminatory terms. The firm could claim that the ban was to protect user security and privacy. Thanks to the exemption’s high bar, the DMU would close its investigation only if the SMS firm provided sufficient evidence, such as an independent report from security experts. Firms will not be able to use the exemption to delay enforcement. Assessment of whether the exemption applies will take place during the enforcement investigation, which has a deadline of six months.
The noble Lords, Lord Fox and Lord Bassam, and my noble friends Lord Vaizey, Lady Harding and Lord Kamall asked about the change to the indispensability wording. The change of the language is to clarify the exemption; it maintains the same high threshold and makes sure that consumers get the best outcomes possible, whether through the benefits provided or through more competitive markets.
I thank the noble Lord, Lord Tyrie, for his detailed analysis of the work of the CMA and his continued support for the legislation. He raised the matter of proper scrutiny of the CMA. I very much agree with him on the importance of this and look forward to continuing that conversation.
The noble Viscount, Lord Colville, the noble Lord, Lord Clement-Jones, and my noble friends Lady Stowell and Lord Kamall sought reassurance that requiring the Secretary of State to approve guidance would not cause delays. The Government are committed to ensuring that approval is given in good time, in order for the regime to be in place as soon as possible. Introducing a statutory timeline for this process would limit the Government’s ability to work collaboratively with the CMA.
My noble friend Lord Holmes and the noble Lord, Lord Vaux, raised the importance of the independence of the regulator, and the noble Baroness, Lady Kidron, spoke about the risk of regulatory capture. I agree that this is an absolutely vital issue. The noble Lord, Lord Bassam, and my noble friend Lord Holmes asked about the resourcing and tools of the DMU. I reassure them that the Government have full confidence in the DMU’s resourcing. There are currently around 70 people working in DMU roles, and we expect the DMU to be around 200 people in steady state.
A number of noble Lords, including my noble friend Lord Black, the noble Viscount, Lord Colville, the noble Lord, Lord Clement-Jones, and the noble Baronesses, Lady Kidron, Lady Bennett, Lady Jones and Lady Ritchie, raised the importance of support for the press sector, with which I agree. The digital markets regime aims to address the far-reaching power of the biggest tech firms and help rebalance the relationship between those platforms and other businesses, including publishers. This will make an important contribution to the sustainability of the press, which is so important in all aspects of our lives.
The noble Viscount, Lord Colville, the noble Lord, Lord Fox, my noble friend Lord Black and the noble Baroness, Lady Ritchie, asked about the final offer mechanism and how this will work. The final offer mechanism is a backstop measure to help resolve sustained breaches of conduct requirements relating exclusively to fair and reasonable payment terms, where other DMU tools are unlikely to resolve the breach in a reasonable timeframe. Unlike the Australian and Canadian models, the final offer mechanism is not a standalone tool to force negotiations. It forms just one part of the DMU’s holistic toolkit for promoting competition in digital markets. The DMU will be able to impose conduct requirements on the firm from day one of its designation, including requirements to ensure fair and reasonable terms. However, we recognise that  some stakeholders may be concerned about SMS firms frustrating the process. Here, the CMA can seek to accelerate the stages before the final offer mechanism, making use of urgent deadlines on enforcement orders and significant financial penalties, where appropriate.
The noble Lord, Lord Knight, and the noble Baronesses, Lady Bennett, Lady Jones and Lady Uddin, asked if the regulator will have sufficient power to deal with imbalances in access to data. The answer is yes. These are exactly the kinds of issues that the DMU will be able to address.
The noble Viscount, Lord Colville, and the noble Baroness, Lady Uddin, asked how the digital markets regime will address the rise of artificial intelligence. The regime has been designed to be tech-neutral, future-proof and flexible enough to adapt to changing digital markets.
I now turn to questions raised today on the competition part of the Bill. I note the interest from my noble friend Lord Sandhurst in the recent Supreme Court judgment on the status of litigation funding agreements—LFAs—and its potential impact on the ability to bring collective actions on behalf of consumers across the legal system. The Government have urgently addressed the potential implications of the judgment on claims under competition law, and we feel this has provided some much-needed certainty to funders and claimants. I also note the interest from my noble friend and others across the House in extending this to all parts of the civil legal system. While I am advised that this Bill is not the appropriate vehicle to deliver this aim, I can assure noble Lords that the Ministry of Justice is actively considering options for a wider response.
I now turn to the consumer part of the Bill. Several noble Lords, including my noble friend Lord Black, the noble Lords, Lord Vaux, Lord Clement-Jones and Lord Bassam, and the noble Baroness, Lady Jones, posed questions about the approach taken in the Bill on subscription traps. The measures being taken forward are the ones which are necessary and proportionate to ensure that consumers are treated fairly and understand what they are signing up to, while balancing further costs and regulatory burdens on businesses.
A number of noble Lords—I hope noble Lords will forgive me if I do not read out the full list, because there are far too many of them and it might test everyone’s patience—raised concerns about potential unintended consequences for charities in relation to the new subscription rules, in particular their ability to claim gift aid. Donations to charities where nothing is received in return are not subject to the subscription rules. Generally, charities will only be in scope if they provide auto-renewing contracts to consumers for products and services in return for payment. This is consistent with other consumer protection laws. I reassure the House that it is not the Bill’s intention to undermine access to gift aid; we are examining this issue closely and will provide a further update in Committee.
Many noble Lords, including the noble Lords, Lord Bassam and Lord Fox, raised other consumer harms such as drip pricing and fake reviews. The Government have recently consulted on proposals to address these and other practices, and our upcoming consultation response will set out next steps. The noble Baroness,  Lady Bennett, also mentioned misleading green claims. This is indeed an important issue, which we hope is already covered by existing regulations.
I agree with the noble Baroness, Lady Hayman, and my noble friend Lord Holmes that the right to repair is important. The right-to-repair regulations which came into force on 1 July 2021 address some of the issues she raised. My noble friend Lord Offord, as the responsible Minister, would be happy to meet her to discuss this further.
My noble friend Lord Holmes raised concerns about Henry VIII powers. Where the powers to amend primary legislation would permit major changes to the legislation concerned, they are subject to the draft affirmative procedure.
I hope that in wrapping up I have responded to at least most of the points raised by noble Lords today. I note that there were other issues raised which I have not addressed, such as alternative dispute resolution and secondary ticketing. I look forward to discussing those items and others during the Bill’s passage. Let me once again thank all noble Lords for their contributions and engagement, not just today but in the lead-up to it. My noble friend Lord Offord and I look forward to further and more detailed debates on these matters and many more besides in Committee.

Lord Fox: Before the Minister sits down, I should say that I mentioned the central role that standards and the setting of future standards have. The Minister need not answer the question now, but could he write to me about the strategy, in a sense, and the involvement that the DMU might have, or should have, in future standards-setting for the technology?

Viscount Camrose: I apologise to the noble Lord for not addressing that. Absolutely I will write.
Bill read a second time.

Commitment and Order of Consideration Motion

Lord Offord of Garvel: Moved by Lord Offord of Garvel
That the bill be committed to a Grand Committee, and that it be an instruction to the Grand Committee that they consider the bill in the following order:
Clauses 1 to 36, Schedule 1, Clauses 37 to 57, Schedule 2, Clauses 58 to 124, Schedule 3, Clauses 125 to 127, Schedule 4, Clause 128, Schedule 5, Clause 129, Schedule 6, Clauses 130 to 136, Schedule 7, Clause 137, Schedule 8, Clauses 138 to 142, Schedules 9 to 11, Clause 143, Schedule 12, Clause 144, Schedule 13, Clauses 145 to 149, Schedules 14 to 15, Clauses 150 to 207, Schedule 16, Clauses 208 to 213, Schedule 17, Clause 214, Schedule 18, Clauses 215 to 223, Schedule 19, Clauses 224 to 253, Schedule 20, Clause 254, Schedule 21, Clauses 255 to 282, Schedule 22, Clauses 283 to 293, Schedule 23, Clauses 294 to 299, Schedule 24, Clauses 300 to 307, Schedule 25, Clauses 308 to 323, Schedule 26, Clauses 324 to 325, Schedule 27, Clauses 326 to 355, Title.
Motion agreed.

Legal Migration
 - Statement

The following Statement was made in the House of Commons on Monday 4 December.
“Migration to this country is far too high and needs to come down. Today, we are taking more robust action than any Government have before in order to bring it down. Since my first day in the Home Office, just three weeks ago, I have been determined to crack down on those who try to jump the queue and exploit our immigration system. I have been working closely with my right honourable friend the Immigration Minister on this subject. The recent figures from the Office for National Statistics show a provisional estimate of net migration for the year ending June 2023 of 672,000. While that is lower than the ONS estimate for net migration for the year ending December 2022, it is still far too high.
When our country voted to leave the European Union, we also voted to take back control of our borders. Thanks to this Conservative Government, we now have a points-based immigration system through which we can control who comes to the UK. We prioritise the skills and talent we need to grow our economy and support our NHS, and we have a competitive visa system for globally mobile talent; for example, last year we expanded health worker visa access to address the urgent need for more social care workers. The whole country can be proud that in the past decade we have also welcomed more than half a million people through humanitarian routes—people from Ukraine, Hong Kong and Afghanistan, including 85,000 from Ukraine and Hong Kong in the past year alone.
The British people will always do the right thing by those in need, but they also, absolutely rightly, want to reduce overall immigration numbers. That means not only stopping the boats and shutting down illegal routes but a well-managed reduction in legal migration. People are understandably worried about housing, GP appointments, school places and access to other public services when they can see their communities growing quickly in numbers.
From January 2024, the right for international students to bring dependants will be removed unless they are on postgraduate courses designated as research programmes. We always want to attract the global brightest and best. We have also stopped international students switching out of the student route into work routes before their studies have been completed. These changes will have a tangible impact on net migration; around 153,000 visas were granted to dependants of sponsored students in the year ending September 2023.
Today, I can announce that we will go even further, with a five-point plan to further curb immigration abuses that will deliver the biggest-ever reduction in net migration. In total, this package, plus our reduction in student dependants, will mean that around 300,000 fewer people will come to the UK in future years than came last year.
These measures are possible because we are building up our domestic workforce and supporting British workers. Thanks to the excellent work of my right honourable friend the Work and Pensions Secretary,  our Back to Work plan will help people stay healthy, get off benefits and move into sustainable employment. It builds on the ambitious £7 billion employment package from the Spring Budget to help up to 1.1 million people with long-term health conditions or disabilities, or who have been in long-term unemployment, to look for work, get into work and stay in work. We are also investing heavily in helping adults learn valuable skills and prepare for the economy of the future, and of course we have world-class universities that help in that endeavour.
The first point of our five-point plan will be to end the abuse of the health and care visa. We will stop overseas care workers bringing family dependants, and we will require care firms in England to be regulated by the Care Quality Commission in order to sponsor visas. Approximately 120,000 dependants accompanied 100,000 care workers and senior care workers in the year ending September 2023. Only 25% of dependants are estimated to be in work, which means that a significant number are drawing on public services rather than helping to grow the economy. We recognise that foreign workers do great work in our NHS and health sector, but it is also important that migrants make a big enough financial contribution. Therefore, we will increase the annual immigration health surcharge this year by 66%, from £624 to £1,035, to raise on average around £1.3 billion for the health services of this country every year.
Secondly, we will stop immigration undercutting the salaries of British workers. We will increase the skilled worker earnings threshold by a third to £38,700 from next spring, in line with the median full-time wage for those kinds of jobs. Those coming on health and social care visa routes will be exempt, so we can continue to bring in the healthcare workers on which our care sector and NHS rely.
Thirdly, we will scrap cut-price shortage labour from overseas by ending the 20% going-rate salary discount for shortage occupations and reforming the shortage occupations list. I have asked the Migration Advisory Committee to review the occupations on the list because of our new, higher skilled worker salary threshold, and we will create a new immigration salary list, with a reduced number of occupations, in co-ordination with MAC.
Fourthly, we will ensure that people bring only dependants whom they can support financially, by raising the minimum income for family visas to the same threshold as the minimum salary threshold for skilled workers, which is £38,700. The minimum income requirement is currently £18,600 and has not been increased since 2012. This package of measures will take effect from next spring.
Finally, having already banned overseas master’s students from bringing family members to the UK, I have asked the Migration Advisory Committee to review the graduate route to prevent abuse and protect the integrity and quality of the UK’s outstanding higher education sector. It needs to work in the best interests of the UK, supporting the pathway into high-quality jobs for the global talent pool, but reducing opportunities for abuse. This package of measures, in addition to the measures on student dependants that   we announced in May, will mean that around 300,000 fewer people will be eligible to come to the UK than came last year. That is the largest reduction on record.
Immigration policy must be fair, consistent, legal and sustainable. That is why we are also taking the fight to illegal migration. Our plan to stop the boats is working. Small boat arrivals are down by a third, even as illegal migration across the rest of Europe is on the rise.
Today we have taken decisive action to reduce legal migration with our five-point plan. Enough is enough. We are curbing abuses of the healthcare visa, increasing thresholds, cutting the shortage occupations list discount, increasing family income requirement, and cutting the number of student dependants. I commend this Statement to the House.”

Lord Ponsonby of Shulbrede: My Lords, legal migration is important to the British economy, but it needs to be properly controlled and managed. In the past decade we have welcomed more than half a million people through humanitarian routes, principally from Ukraine, Hong Kong and Afghanistan. We in the Labour Party support these humanitarian routes, but the overall figures, which are way above these humanitarian routes, are out of control. People are understandably worried about housing, getting local GP appointments and access to public services when they can see that their communities are growing. The net migration figure stood at 672,000 last year, which is three times the amount at the 2019 general election. There has been a 65% increase in work migration visas this year, and this includes a 150% increase in health and care visas.
Yesterday’s announcement is an admission of the Government’s failure on the immigration system and the economy. The Prime Minister is now proposing policies he opposed six months ago and opposing policies he helped introduce. The Labour Party has said repeatedly that net migration should come down and called for action to scrap the unfair 20% wage discount, raise salary thresholds based on economic evidence, and bring in new training requirements linked to the immigration system as well as a proper workforce plan for social care. While the Government have been forced to abandon the unfair wage discount that they introduced, they are still failing to introduce more substantial reforms that link immigration to training and fair pay requirements in the UK, meaning that many sectors will continue to see rising numbers of work visas because of skills shortages. The Labour Party is also calling for a reformed and strengthened Migration Advisory Committee that could advise on the impact of all policies to ensure that the details are correct.
There has been a failure to invest in skills and apprenticeships. Some 160,000 fewer people have taken up apprenticeships under this Conservative Government. For engineering and manufacturing, apprenticeships have fallen by half while engineering visas have increased. The Government have resisted calls to link requirements for skills training to the immigration system, and the UK is failing to train and pay people in the UK properly, leading to a skills shortage and a low-wage economy that relies on migrant workers.
In addition to this, the asylum system is broken. As of October, the number of legacy asylum cases waiting over a year for a decision to be made stood at 32,109. There were, in addition, 85,000 cases under a year old that had not been dealt with; thus, the overall backlog has not been reduced.
The Home Office has now hit its target for the number of caseworkers working on asylum cases, reaching 2,500 full-time staff by the end of the summer. However, the turnover of staff rose between April and August 2023 to 36%, having previously dropped to 25%. This puts into question the level of expertise in the team and the quality of decisions being made.
Following changes to Immigration Rules, which make it easier to withdraw an application on behalf of an asylum applicant, the number of asylum withdrawals has risen to 17,000. In a recent Select Committee hearing, the Permanent Secretary stated that he did not know the whereabouts of these 17,000 people. It may be that the length of time that cases are being left before being processed allows people to abscond, or that details have become incorrect over time, particularly when they move address so frequently; or it may be that the Home Office is being stricter with its criteria for withdrawing cases.
I understand that the reason for the withdrawal is not noted. I ask the Minister: why is the reason for withdrawal not noted and does he believe that it should be? Either way, losing track of 17,000 asylum seekers is representative of the danger of allowing such a backlog to build up in the first place. Of course, legal immigration is important to our economy and, of course, we should meet our humanitarian obligations. But with net migration figures at 672,000 last year, with government policies that flip and flop, and local public services under pressure, it is inevitable that the voting public become sceptical and disillusioned. The Labour Party says there should be a longer-term plan for immigration for the economy and for our country.
I turn to a separate matter, which I received an email about today. I see that the noble Baroness, Lady Stern, is not in her place, so I will repeat the questions from Universities UK about the higher-education sector and how it may be affected. First, is the Minister able to outline timescales in terms of reference for the Migration Advisory Committee’s review of the graduate route visa?
Secondly, do any changes to the salary threshold and financial requirements for work and family visas apply to new entrants only and, if so, what is the situation for existing visa holders? Thirdly, can the Minister give clarification on what the new salary discount will be for roles listed on the immigration salary list if they are not part of the 20%?
Lastly, will the Government promote a clear message that international students are welcome in the UK, and that the Government remain committed to the international education strategy?

Lord German: My Lords, yesterday’s Statement to the other House was one where figures were plucked from the air; one must draw the conclusion that they are arbitrary, in the sense that they do not have any background in what one might call a forward workforce  planning regime for the country as a whole. One would have expected that, if you were to do a workforce planning regime for the future, it would be timed, looking forward as to the requirements on our workforce in this country.
It is certainly the case that the Government are well aware of the length of time that it takes to train individuals and get people moving along that pipeline. It is also certainly the case that the issue of medium-salaried people has come out as one of the major concerns of the document put before us yesterday.
The Statement, when examined for the sorts of people that the country needs who are going to be excluded by the regime, includes such people as butchers, chefs, welders and joiners. It is quite clear to anyone who has been around this country looking at the hospitality and tourism sectors that there are significant shortages of people to fill those places. It is not infrequent that you see a sign for a chef outside a restaurant where they are short of staff. The question to which we need to address ourselves is: where is the forward planning behind the figures that have been put before us?
Equally, the regional pay disparities around the United Kingdom mean that the wage levels in London and the south-east of England are very different from those that you find in other parts of the country. The wage levels that we are being told about have a bit of a sniff for the London and the south-east but are damaging to other parts of the economy where wage levels are different. The correct form of workforce planning would have had all these issues under review.
The issue of social care visas is obviously one of a lack of investment in the past. The Migration Advisory Committee has previously said that the Government’s persistent underfunding of local authorities, which of course fund adult social care, is the most important factor in the staffing crisis. The Government now say in the Statement that care workers without families will ensure that we have enough people to meet the demands of our caring services.
Equally, we are assured that the CQC will now oversee all this information, but there are problems for the CQC because its inspections do not actively address the working conditions and well-being of care workers. In that sense, the independent regulation of health and adult social care contains significant oversight gaps. How is the CQC going to ensure that those are fulfilled for those filling these vital posts from our immigration system?
I have questions about the impact upon companies in the sectors that are most impacted by the Statement. This comes on the back of last night’s discussion in this House. The Minister at that time did not recognise where I got my figures from: it was paragraph 12.2 of the Explanatory Memorandum for the regulations on fees that we were talking about last night. It says, and the words are quite clear, that there will be a significant impact on companies—these are the Government’s words—of
“tens of millions of pounds”.
On top of that, companies are now having to think whether they can afford to pay these amounts of money in order to recruit. A failure to recruit sufficiently for a company to operate means that the UK company itself might be in danger of not being able to continue  to operate, and so UK workers might be affected by that decision. It is worth understanding what training and workforce plan is behind the migration strategy.
I have what might be thought of as a cheeky question, but it is one that worries me considerably, regarding the ability of British citizens to bring their partner to the United Kingdom to live with them, and with their children if they have any. I had a think about this and it was clear to me that a significant number of current government Ministers have partners from another country —we can all think of examples of that. My question is: what number of our population have partners from another country, given that £38,700 is a large figure for someone to be able to bring their partner to this country to live with them?
The danger here is that, in that development of a partnership between two people, the British citizen could think, “I can’t bring my partner to this country, so I will go to their country instead”. If they decide that, we might lose some of the vital people whom we need for our country, especially remembering that we are heading towards a time in our society where, for every elderly person, we will have only two people of working age. There is a big change coming, and we need to be prepared for it.
Have the Government assessed how these restrictions to legal migration will impact the numbers on overstaying visit visas? How many British citizens will be driven out of the country to live with their partners and children elsewhere in the world, as in the question I just addressed? Will the restrictions apply to workers who are already sponsored? Sometimes people have to renew and, when they do, will the restrictions that apply in this new Statement apply to them when they renew their work permissions in this country? Will an existing migrant worker’s salary have to rise in order to extend their visa? Finally, have the Government considered the disproportionate impact that the increase in family visa requirements will have on British citizens who live outside the south of England and London, because of the wage disparities around the rest of the United Kingdom?
That is a range of questions which we need to have answered, but the context of it all is: what is the plan? Is it merely a decision to have an arbitrary number which looks good to the public—or looks good in an election manifesto—rather than one which faces the problems which our economy, and our future as a country, will be needing?

Lord Sharpe of Epsom: My Lords, I thank both noble Lords for their comments and say to them that the level of legal migration remains too high. As a result, we have announced the five-point plan—my right honourable friend the Secretary of State for the Home Office announced it yesterday, as the House knows—and this package of measures, taken in addition to the measures on student dependants that we announced in May, means that around 300,00 people who were eligible to come to the UK last year would not be able to in future.
As the noble Lord, Lord Ponsonby, has noted, the UK has experienced unprecedented levels of immigration since the pandemic. The figures are widely understood,  and this is partly because of our generosity towards people fleeing conflict and persecution in Ukraine, Hong Kong and Afghanistan. Over 80,000 people have immigrated to the UK on our Ukraine, BNO and resettlement schemes in the last year. However, it is also because of the rising numbers of overseas students and care workers that the Government have taken action to address the rise in legal migration.
The new package involves a number of measures—five, which have been noted. We will reduce the numbers on health and social care visas and end the abuse of that route by stopping overseas care workers from bringing in family dependants and requiring social care firms in England to be CQC registered before they can sponsor migrant visas—I will come back to the CQC in a moment. We will remove the right for care workers and senior care workers to bring dependants from spring 2024. Care workers and senior care workers arriving through the health and care visa also bring a large number of dependants per main applicant, with approximately 120,000 dependants accompanying 100,000 care workers and senior care workers in the year ending September 2023. As has been noted, we will increase the earnings thresholds for those arriving on the skilled worker route, with the minimum threshold rising by 48%, from £26,200 to £38,700 from spring of 2024. Those coming on the health and social care visa route will be exempted, so we can continue to bring the healthcare workers that our care sector and NHS need.
The noble Lord, Lord Ponsonby, specifically mentioned the shortage occupation list and scrapping the 20% going-rate salary discount for shortage occupations, as recommended by the independent Migration Advisory Committee, which, I note, has not called for any more powers. We will establish a new immigration salary list, which will retain the 20% discount on the general salary threshold. This means that migrants working in lower-paid salary occupations on the immigration salary list will still benefit from the minimum salary floor of 80% of the new general salary threshold of £38,700, but migrants in occupations where going rates are higher than the general salary threshold would not be sub to further salary discounts.
We will ensure that people can bring only dependants whom they can support financially by raising the minimum income for family visas to the same threshold as the minimum salary threshold for a skilled worker. We have also asked the Migration Advisory Committee to review the graduate route to ensure it is fit for purpose, to prevent abuse and to protect the integrity and quality of our UK higher education.
On graduate migrants, I am very happy to reaffirm our commitment to attracting the best and brightest global talent to support growth. We are committed to ensuring that happens and have taken a number of steps to do it, including by introducing an elite route to attract the best and brightest, maintaining the UK’s status as a leading international hub for emerging technologies. We have created a scale-up visa, allowing those with a job offer from a recognised UK scale-up to qualify for a fast-track visa. We have reformed our global talent route by expanding the criteria so that global prize winners automatically qualify, launched a  global business mobility visa, and established the high-potential individual visa route to allow graduates from the world’s best universities to come to the UK.
The changes we are introducing—in answer to the question from the noble Lord, Lord Ponsonby—apply only to those who come here on new visas. That means that workers with dependants already in the UK will be able to stay.
The noble Lord, Lord German, asked about the salary threshold affecting hospitality, accommodation and food services. Employers will still be able to recruit workers from overseas to those industries, but it is right that we increase the salary threshold to the level of median earnings to ensure that we do not undercut UK workers by using cheaper overseas labour, and to prevent downward pressure on wages.
As my right honourable friend said in answer to Yvette Cooper in the other place—there was no reference in either of the noble Lords’ comments to this—the £7 billion employment package announced in the Spring Budget will help 1.1 million get back to work and “stay in work”.
We do not believe that these measures will discourage carers who contribute to the UK economy. It is still an extremely competitive offer. We launched the health and care worker visa on 4 August 2020. This has delivered on the Government’s commitment to introduce a route which makes it quicker, easier and cheaper for eligible people working in health and social care to come to the UK. Those affected by this package are, as I said earlier, predominantly people with dependants who make a more limited contribution to the economy than those coming under other work routes, minimising the impact on UK growth. Care workers and senior care workers arriving through the health and care visa bring a large number of dependants per main applicant, with approximately 120,000 dependants accompanying 100,000 care workers and senior care workers in the year ending September 2023.
I said I would come back to the CQC. What we mean by regulated activity in the context of social care is that this relates to personal care. Personal care is defined as providing physical assistance to a person where they are unable to perform activities in connection with eating or drinking, toileting, washing or bathing, dressing, oral care or the care of skin, hair and nails. The regulated activities are further detailed in Schedule 1 to the Health and Social Care Act 2008.
There will be a regulatory impact assessment, which will be developed in due course, as well as an equalities impact assessment. I think that answers two of the questions from the noble Lord, Lord German.
I will answer the questions from the noble Lord, Lord Ponsonby, about withdrawal from asylum processing. I do not know why we do not record that information. I will endeavour to find out and I will certainly come back to the noble Lord. I can confirm that in the year ending September, 41,858 initial decisions were made in terms of immigration processing. That is twice the number that were made in the previous year. I am reassured that the clearance of the backlog is on track.
These measures are very sensible. They are clearly carefully thought through, and I commend them to the House.

Lord Davies of Brixton: My Lords, I thank the Minister for his answers to the earlier questions. I shall avoid the temptation to discuss the proposals in general—I just wanted to focus on the significant impact that they are going to have on our higher education system. Perhaps I should mention that members of my family are employed in higher education. I am sure that the Minister understands that higher education is one of our success stories in generating public good and also, as an export, generating income for the country. Unfortunately, we have developed a system of funding higher education that depends on legal migrants; the education of UK citizens and residents depends on generating a flow of overseas participants in higher education who count as legal migrants. If the number of foreign students declines, that will have a direct and immediate impact on the education that we provide for UK residents.
My question was in a sense forestalled by the question from my noble friend, but the Government have to do more to indicate that they really stand by the policy of encouraging people to come to this country to benefit from the higher education that we can provide, because otherwise it will harm them and harm us. The policy is already having an impact; even the Statement itself will have deterred some foreign students from coming to this country, and the proposal to limit the number of family members who can come will have an impact on the students coming to this country, and hence on the education that we can provide for UK residents. Will the Minister assure us that he is seized of the point and that it is an issue that the Government will consider carefully in the light of the impact statements to which he has referred?

Lord Sharpe of Epsom: My Lords, I agree with the noble Lord. Obviously, the universities and the education sector provide an enormous amount of good to the country in many ways, including, of course, in terms of soft power. As the noble Lord indicated, it is an export industry. We have reconfirmed our intention to attract the best and brightest. Our manifesto committed to establishing the graduate route. More than 100,000 people last year to September 2023 were issued visas for the graduate route. We have asked the Migration Advisory Committee to review this route to ensure that it is fit for purpose and prevent abuse, protecting the quality and integrity of UK higher education. However, as I said earlier, I note the noble Lord’s points and broadly agree.

Baroness Bennett of Manor Castle: My Lords, following on from the question asked by the noble Lord, Lord Davies of Brixton, on the Government’s own figures they expect there to be 140,000 fewer people coming in through student routes. How much income is expected to be lost to UK universities overall from that? Have the Government made any assessment of the regional impacts of this? There are northern and Midlands cities for whom the universities are a very significant part of their economy, and students and their dependants coming in are a significant contributor to the life and economy of those cities.  Have the Government got an idea of the total cost of the 140,000 cut in students and how that cost will be distributed regionally?

Lord Sharpe of Epsom: My Lords, the figures that I have are in terms of sponsored study to the year ending June 2022. There were actually more than 400,000 main applicants granted and 152,000 dependants were granted—so it is the dependants who will not be coming. In terms of dependants, about half of them are adults and only half of them actually work, so I suspect that the economic impact of their non-arrival will be very minimal.

Bishop of Norwich: My Lords, I have three brief comments and questions. We know that there are 152,000 vacancies in social care in England, as reported by Skills for Care. This is of course a concern for the well-being of vulnerable people. The National Farmers’ Union reports a national shortage of 80,000 vacancies in the horticultural and agricultural sectors, but His Majesty’s Government estimate 40,000. This of course leads to a massive reduction in production and has an economic impact. As we know, this is further exacerbated in our rural communities. What conversations has the Minister had with these sectors about the risks inherent in their new policy?
My second point is that families come in all shapes and sizes, but when they are together they are stronger and more resilient. Families help individuals, communities and our society to flourish. Only recently, I met a Nepalese care worker in a rural church in Norfolk, off any bus route and not having her own transport. The church community has embraced her as one of their own and learned much in the process. Each week, she sends home a significant proportion of her earnings to support her very young family, but this is costly to that family’s bonds of relationship and she longs to see them. Will the Minister reassure the House that the department has applied the family test to these policies, and will he publish that assessment?
Finally, many faith communities greatly benefit from the presence of religious workers from overseas. The Church of England benefits from the ministry of clergy from all around the Anglican Communion, enriching our communities and resourcing individuals’ ministry for life, often equipping them for when they return to their country of origin to minister in places of conflict and abject poverty. Many UK clergy, me included, have benefited from overseas experiences. Will the Minister consult faith communities about exemptions for religious workers, many of whom earn below the published threshold?

Lord Sharpe of Epsom: I thank the right reverend Prelate for his questions. Of course, there is no barrier to recruiting people to the Church, as long as £38,700 is paid to them. I do not think that unreasonable, I am afraid. I appreciate that salaries may not be as high in the Church as he might like, never mind the rest of his colleagues, but that is the median salary, as I said earlier, and it is not unfair. As for recruiting to the health and care sectors, I think I answered that question earlier. Again, there are exemptions in place  for those people and we obviously value their work and their service here. I do not know whether the family test has been applied. However, we also regard families as very important. If the lady whom the right reverend Prelate referenced is sending the bulk of her money home, one wonders exactly what the economic benefit is to this country as well. That is obviously an unfortunate state of affairs, but it is worth mentioning.

Baroness Bennett of Manor Castle: My Lords, just to follow up on a previous question, I am currently looking at reports of Home Office modelling that suggests that there are 140,000 fewer students arriving. Perhaps he will write to me about that figure, because it appears to be a Home Office figure.
I want to pick up on the point from the noble Lord, Lord German, about British people bringing foreign spouses and children into the UK. The Minister may be aware that in 2015, the Children’s Commissioner for England produced a report identifying up to 15,000 children who belonged to what were then called Skype families: children whom the Children’s Commissioner said were suffering from stress and anxiety by being separated from a parent by the rules brought in in 2012 that demanded a salary for the sponsoring partner of £18,600 for a partner and even more for children. There have long been complaints that there is no allowance made for the potential income of an incoming spouse, who may well be able to find a job and be a high earner; only the British resident can be counted to sponsor their spouse in.
We are now in a situation where the salaries of 60% to 70% of British workers would not be enough to sponsor a foreign spouse to come into the UK. I have been speaking to people affected by this, many of whom have found that even their MP does not understand the situation. Many people say, “You’re a Briton—of course you must be able to live in your own country with your spouse and your children must be able to come here”, yet 60% to 70% of British people will now be unable to live in their own country with a foreign spouse and will be separated from their children. Do the Government really think that is an acceptable state of affairs?

Lord Sharpe of Epsom: My Lords, as I have indicated, we estimate that only around 25% of dependants work when they come to the UK—half of the adult dependants; the other half are children.
I now have a marginally better answer for the right reverend Prelate on the family test. I can confirm that the policy is compliant under the Human Rights Act, which includes respect for family life.

Baroness Lawlor: I thank the noble Lord for following up on yesterday’s Statement today. I have three questions.
First, on student visas and the granting of permission to dependants to come to this country, which I understand will be restricted to those on designated research programme courses, does this apply primarily to PhD students in laboratories or in both science and humanities subjects?
Secondly, we have 680,000 international students in this country at the moment. The Statement mentioned the daily life strains that can be put on housing, our health services and education for our children. Will my noble friend consider extending the review that he mentioned to the educational strain on the hard-pressed resources of our universities—with teaching and lecturing commitments and additional administration—of having just less than 700,000 additional students?
My third question is a more constructive one on opportunities for the future. At the moment, a number of our universities have campuses abroad; there is a network of such universities in the UK university overseas campuses network. By the end of 2021, it had on its books 17 universities with 27 campuses abroad. Is there more to be said for putting the undoubted energies of the Government into promoting such campuses abroad? Perhaps, later on in his or her  course, a student could come to this country for a special additional course, having gone through the undergraduate system in his or her own country. Will my noble friend consider or pass on those questions?

Lord Sharpe of Epsom: I am happy to confirm that PhD students will still be able to bring dependants. I do not believe that there is any differentiation between science and humanities subjects. I absolutely take my noble friend’s point about hard-pressed universities, particularly in accommodation and the schooling system more generally, which, as we are all well aware, is under significant pressure. My noble friend makes some very good points about campuses abroad and the efforts the Government ought to make to promote them. I will certainly take her comments back and perhaps share them with the Department for Education.
House adjourned at 9.04 pm.